Cold Chain and the USPS Crisis

In order to reduce annual losses in the billions, the new management team at the U.S. Postal Service (USPS) has banned overtime and reconfigured daily work processes to emphasize sticking to dispatch schedules in order to allow delivery personnel to complete their rounds within their shift.

This new process changes the emphasis on getting every last piece of mail into delivery trucks before departure to allowing for a day or two more transit time in the name of lower costs.

Nationwide, there have been reports of mail piled up at distribution centers and medications being “lost” in the system for a week or more. This particularly makes an impact on temperature sensitive items that are packed in insulation containing cold elements designed for just a few days transit.

The USPS shift to a tightly scheduled labor plan is happening in the midst of a pandemic and an election. While this is stressful, the organization has to change. Critics ask: “If not now, then when?” The semi-private USPS has had a reputation for being “loose” with overtime, and this has been explained by advocates as being needed to ensure mail is delivered daily. The deficit spending—largely to cover overtime and pensions—is periodically covered by Congress.

How then do commercial package services reliably deliver at predictable times and make a profit? Can USPS morph into a productive and efficient national resource with expertise in last-mile package and mail delivery? Can it be a critical service and be profitable?

The paradigm shift from a high labor cost, high touch service to a more productive, reliable, time sensitive and profit-focused organization is going to be painful. With less paper documents and more packages to process, building layouts and workflow will need to change. This means disrupting very rigid labor practices.

Critics point to the difficulty of processing millions of ballets during elections. A simple solution is to have a standard envelope size for ballets nationwide because that’s how the big parcel carriers are able to process “letters” as packages using automation.

In the end, we all hope to see time-definite service at a reasonable cost. The cost of handling documents will not go down and postage rates will increase—and thus the shift to electronic communication alternatives will continue to surge.

You may have noticed that your junk mail is rarely national now, but is pre-sorted (lowest rate) and usually from local companies such as realtors and area merchants.

Companies with centralized billing are pushing for electronic statements to get away from having to mail paper with a first-class stamp. Packages, however, will continue to proliferate, and USPS will be one of the key providers of local pickup and delivery. USPS already outsources truckload transit, and this will continue.

In the meantime, postal centers will begin to look more like automated package distribution centers and less like mom and pop stores with a receiving dock.

What this means for cold chain and time sensitive products is that after some re-engineering and perhaps some labor strife, we’ll begin to see a new postal service that balances its current dedication to delivery everywhere, every day with a level of efficiency that makes it sustainable without an annual labor cost supplement.