Remarks by Postmaster General and Chief Executive Officer Louis DeJoy at the August 9, 2022 Postal Service Board of Governors meeting – Newsroom
WASHINGTON DC- The remarks below are as prepared for delivery by Postmaster General and CEO Louis DeJoy at the public meeting of the Postal Service Board of Governors on August 9, 2022.
“Thank you, Mr. President.
I would also like to publicly welcome Governor Tangherlini and Governor Kahn to the Board and thank all Governors for their guidance and public service.
The leadership team and I look forward to your continued consultation and support as we move forward with the many initiatives underway at the Postal Service.
In a few minutes, Joe Corbett will give you an overview of our current financial results which are improving despite strong inflationary pressures.
When I first joined the Postal Service, we expected to lose $160 billion over the next 10 years and run out of short-term cash.
Today, that deficit is significantly lower, but we are still looking at losses of $60 billion to $70 billion over this period – which will quickly wipe out our $20 billion cash balance – unless we take immediate and substantial measures.
All stakeholders must realize that every day lost in executing our strategy will consume cash and eventually build up to a cash shortfall that will require more aggressive actions from us or the federal government.
As we celebrate the passage of the Postal Reform Act and the reduction in our costs it has brought about, none of us should lose sight of the fact that one of the major benefits of the new law is that it is also simply a deferral of our “pay as you go” portion of our retiree health benefit obligation, allowing us to prepare for this massive expense that we will be responsible for in a few years.
Our required payments to our employees’ retirement health care plan begin again in 2026 and reach approximately $6.7 billion per year.
We won’t be able to make these payments unless we commit and complete all of our initiatives in a timely manner – and that’s exactly what we try to do!
This loss reduction effort will include the transactional improvements we need in our day-to-day operations – and the structural changes we need to make to overcome years of neglect – neglect in strategy, neglect in discipline, and neglect in resolution.
From an operational perspective, our teams led by Dr. Josh Colin, Isaac Cronkite and our new recruit Kelly Abney are working hard…and together…to improve our service, and we have already made significant progress in this regard.
Scott Bombaugh will tell you later about improving our service ratings across the board.
Postal management has reduced almost every detail of our operations and corrected negative processes or actions that impair service or increase costs – plant by plant, delivery unit by delivery unit and transport lane by transport lane.
This transactional effort will yield better results, but will fall far short of what we need to do to thrive in the near and distant future.
The improvements required for future survival can only be achieved by making the necessary structural changes in our processing, transportation and delivery network.
Our concepts are not revolutionary – they are basic and achievable and will eliminate thousands of truckloads per day, rid us of wasteful operating practices, increase the density of our delivery routes and align our service and prices to generate new revenue in the market.
These initiatives also result in a significant reduction in our carbon footprint.
Our challenges in delivering this new network in a timely manner lie in uncovering and rectifying the costly complexity of our existing operations, streamlining them and doing so in a way that mitigates our performance risk.
Our difficulties also lie in resisting and interfering with necessary changes that will ensure not only our survival, but also our prosperity.
Stakeholder initiatives to delay the simplest of our operational changes to integrate our network, improve our service and reduce our costs are relics of our failed strategies of the past.
These actions have led to the near financial ruin of the Postal Service and I ask all stakeholders – mailers, mailers, legislators and regulators – to support this leadership team and this Board of Governors in what I believe should be our collective efforts to move quickly with our plans to save the post office and ensure a vibrant organization that delivers the excellent service our customers and our country deserve.
Some other operational elements that I would like to highlight are the following.
We are very proud of our continued partnership with the White House, the Department of Health and Human Services, and the Defense Logistics Agency to provide COVID test kits nationwide.
To date, we have delivered 550 million test kits to 180 million homes. Our average delivery time nationwide is slightly over 1 day.
Election season is upon us and so far this year we have successfully participated in 54 primaries, polls and special elections, delivering approximately 40 million ballots to voters.
Americans need to be confident that the United States Postal Service is well prepared and will provide extraordinary service in the upcoming November election.
We are now preparing for our peak season and I am confident that we will be in good shape to meet the challenges of this year.
We will add approximately 120 parcel sorters across the network this year, bringing the total since the Delivering for America plan was released to 250 units across the country, while adding more than 13 million square feet to accommodate them.
This, combined with improved operating practices, will make the United States Postal Service your best option for shipping your packages…and your only option for cost-effectively mailing your Christmas cards. So ship them together, integrated!
We continue to recruit new employees into organizations with job fairs and other initiatives across the country with above average success.
Many of our functional areas are almost fully staffed and we have significant increases in our full-time career positions. This will allow us to be less dependent on seasonal employees who we believe will be difficult to hire this season.
That said, we still have difficulty hiring new letter carriers, especially in rural communities. We are deploying new organizing tactics and working with our union leaders to find ways to improve this situation.
As everyone knows, the progress we have made to improve our financial position as well as our future operating strategy has allowed us to increase our commitment to electric vehicles in line with our delivery vehicle strategy.
We have also committed to filing additional environmental impact statements about our acquisition intentions at more frequent intervals.
This will allow us to capitalize on any opportunities related to electric vehicles – as the market catches up to the needs of postal services and leadership in this initiative – and as our operating strategy continues to evolve.
Although NEPA’s filing strategy is new, the Postal Service’s underlying fundamental strategy of performing a step-by-step analysis of total operating cost, our financial condition, and network changes when taking acquisition decisions, has been around since we announced the program more than 18 years ago. months ago.
This flexible strategy has allowed us and will continue to allow us to take a thoughtful and profitable approach as our conditions improve and new opportunities arise.
I also want to take a moment to thank the Postal Service Vehicle Team who have spent many years investigating issues and making additional recommendations as our operating and financial conditions have changed.
I am convinced that we have the best and the only team in the country that is solely focused on understanding the needs of the postal service.
This team has and will continue to guide my decisions to reduce our impact on the environment while protecting our employees and fulfilling our mission to the American people, as defined and required by law.
I would now like to salute our management team. First, to the 15 people on my management team and the 30 or so vice-presidents who, over the past year, have become champions of this transformation. You have evolved as thought leaders by strategizing and implementing the changes we need to make in a powerfully collaborative way. We are a united and determined team.
We are now harnessing the power of our District Managers, Postmasters, Plant Managers, Supervisors and other field staff to assist us in the major operational and service initiatives we pursue.
To achieve these goals, we will need all our hands to participate in our initiatives, including the leadership of unions and management associations and every employee, because the transformation required will require all our efforts and will require us to take actions that require confidence in the face of harsh reality.
I pledge to continue working to earn that trust as we continue our transformation and our mission.
As everyone knows, inflation hit the country hard and the postal service did not avoid its impact.
We expect inflation to beat our expectations by well over $1 billion over our planned 2022 budget.
For this reason, my recommendation to governors will be to stay the course to raise prices again in January.
I will soon start evaluating what we will do in 2023, as I am committed to keeping the shipping community informed.
We have to deal with the reality of our financial situation and the impact that inflation will have on our improvement strategies.
And finally, I want to thank all of our postal employees for their hard work and express my gratitude for their service to the American people.
I ask that you trust your leadership team and understand that we are committed to improving your work environment and ensuring that you enjoy a positive relationship and long-term career with the Postal Service as we together serve our nation.
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