On this episode of Mailin’ It, we’re talking to Postmaster General, Louis DeJoy, about the upcoming holiday season and what the Postal Service has done to prepare for it. We’ll also discuss the progress made on the 10-year Delivering for America plan and the vision for the future!
This week on Mailin' It, we welcome back Postmaster General, Louis DeJoy, to talk about this upcoming holiday season and all the preparation the Postal Service has done for it. Join us as we’ll learn more about the improvements made to delivery services, peak season staffing, and more. We’ll also get an update from Louis on the 10-year Delivering for America plan, and where the organization is headed in the future.
Dale Parsan:
Hey everybody. Welcome to “Mailin’ It!” The official podcast of the United States Postal Service. I'm Dale Parson.
Karla Kirby:
And I'm Karla Kirby. We've got a good one for you today. This episode, we welcome back Postmaster General Louis DeJoy to the podcast. Louis is going to talk with us about his expectations for the holiday season and how the Postal Service is planning it for us.
Dale Parsan:
While we've got the Postmaster General in the studio with us, we're also gonna take an opportunity to get an update on his 10 year Postal Service transformation plan, also known as Delivering for America. Louis, welcome to Mailin’ It!
Louis DeJoy:
It. Hey guys, great to be with you again.
Dale Parsan:
In the last few years, the country has seen a lot of change between the pandemic, the economy, and consumer spending habits. What does the Postal Service expect in terms of mail and package volumes for this holiday season?
Louis DeJoy:
So like the rest of the industry and the retail industry especially, we expect to see you know, a slight reduction in e-commerce type of activity, package, home delivery, types of activities but still significantly above where we were two years ago, three years ago, before the, you know, before the pandemic. So there's been a handsome take rate in terms of this model of sales and delivery. We're excited about it. From our standpoint we don't necessarily have a density problem because we've gotta go to every home, every day anyway. So I see tremendous opportunity in the of stability that we have built over the last you know, couple of years in the organization to really fine tune our execution and our cost models as we move forward. And trying to get on that track to deliver to the American people become the preferred delivery provider and be the most reliable and most affordable. So for us, it's gonna be good to see a, to have a level of activity that is not coming at us at a thousand miles an hour. I think we're very much in control of what we're about to embark upon this season. And the American people should expect a great service that the United States Postal Service.
Dale Parsan:
When we're coming to this kind of a determination around what we expect for volumes, are there key indicators that the Postal Service sees that maybe the public, the general public doesn't?
Louis DeJoy:
So the general public kind of knows what they're gonna be spending, Right? They kind of feel it, especially, you know, right now. So we have been you know, closely monitoring our forecast on this. I think we all kind of deal with the same external forecasts of what the economy's doing and what we think the public's gonna do, and looking at our individual contracts, you know, so we all do that kind of work. And as a, as a service provider you're kind of relying on those types of forecast.
Karla Kirby:
So I think we can agree it's been a challenging time for the shipping industry, especially in terms of transportation and the tight labor market. Right? So, keeping that in mind, how is the Postal Service positioned itself relative to these challenges? And are there specific advantages that the Postal Service can leverage?
Louis DeJoy:
We have taken on a lot of initiatives as an organization to improve in terms of our utilization of our existing transportation system. It was underutilized. To open up to a broader carrier base over the last two years. The leadership's done a really, really good job at that, having various initiatives. And we've gotten a lot of participation. We got a lot of participation in new suppliers and so forth. And that's long term. It's very, very important strategy for us to be successful. Cause remember, we're creating a ground, you know, a much better… We have a lot of opportunity in terms of our delivery service and also our cost in terms of having an effective ground system. We're also seeing the market has helped us. The market has softened a little.
So we have a lot of participation from carriers where they know they're getting more comfortable with serving us. About 87% of our carriers only did business with us. Right. So we're broadening that out to get more into to take advantage of the big market because we always have freight and we always have freight from the same places. So we're pretty predictable. We run trucks whether we have one container in them or not, because it's gotta be there. So we're seeing you know that's working for us very nicely. And then there is a softening in the market. While fuel prices are up, it's a much different market than it was just a year ago. So we're seeing some cost relief there also. So I'm pretty excited about the team we have managing that. So that is, I feel pretty good about that.
On the labor front, you know, we face the same market that everybody else does, but we had our own internal issues that compound even in a good labor market. We had a pretty bad labor staffing practice. Right. And we've, over the last two years, we've tried to, you know, tried to fix that. We've converted over a hundred thousand people to full-time employment. We have huge hiring fairs around, around the country. And when we offer the promise of long-term career and respectable retirement, that's the Postal Service. And we're, we're reintroducing that with a great deal of energy so that someone walking, you know, coming in as a mail carrier can rise up and sit in my seat one day. It's happened before. And I think we kinda lost that promise over the years for a lot of different reasons.
But we're trying to you know, get back to that. So the result is, I think we're only adding 25,000 people for peak season this year. I mean, it's significantly down from years past cuz we're staffed, we're staffed up. So I'm feeling pretty good about where we are on the labor side for peak. And I feel good about our position long term. Cuz there is competition for labor and we can win that with the promise of career and all the other things that the Postal Service has to offer to its, you know, to its long term employees.
Dale Parsan:
It's a very attractive place to work.
Karla Kirby:
I think you make a great point. We absolutely have an attractive benefits package. So, all things considered, you sound very excited about the upcoming holiday season. So what are your specific expectations around service performance?
Louis DeJoy:
So the number one thing is to meet our service commitments to our customers, right? And that is to perform, you know, within the standards that we have for the different classes of mail that we, we move. I expect us to do it without a lot of fanfare and not have to have our people perform herculean efforts to pull it off. We should have a, you know, a modest rise in intensity, but where staffed now and we're, we have a certain operating model, operating disciplines that we are bringing to you know, to the organization that enable us to absorb the additional volume. I mean, we put in 250 conveyor systems since I've been here. All that volume previously was handled by hand multiple times. So our capacity is like 60 million packages a day. I don't think we'll see that, but we have peaks and valleys where that rate to get there needs to be accommodated, right? Within a day, within a day between 12 and 2 or whatever, we need that kind of rate to get through. And if you don't, you have backlogs and, and so forth. So I think that we're gonna be, you know, pretty good there. What I'm really impressed with in the organization that makes me very proud of the team of what we have done now with how we, you know, how we operate, the visibility tools that we deploy, the collaborative interaction that gets on there if we have a miss, right? It doesn't last very long, right. We're able to recover, We're able to see it and recover. You know, last year, if you looked at a day late, you know, the next morning from our service standards, we were over 96% in terms of delivery in a package business - over 96%. Phenomenal, right? A lot of that was in the next morning because we ran a six to nine in the morning type of operation to get the, you know, get it out the door.
People are very accommodating with that during the season. For people are happy to begin with – it’s during the season. They don’t notice. When your package is missing for ten days, people definitely notice. So we're gonna be very good and we are going to anything that doesn't make where it's supposed to be is gonna be there very, very close. So I'm, I'm excited about it. Right. And long term, I think the Postal Service will be the cost effective peak season delivery provider.
Dale Parsan:
Great points. While the holiday season is the best time of the year, for me personally, I want to take an opportunity to pick your brain a little bit on the Delivery For America Plan. We introduced it in the past year and the idea that the Postal Service will become financially sustainable and improve service performance. So far we've been able to make a lot of good progress on both of those fronts. But I wanna get your personal take on each of those. How do you assess progress in getting the Postal Service on a financially sustainable path?
Louis DeJoy:
So we could take service first. I mean, I talked to our shipping customers all the time, the mailers and so forth. Service has been pretty stable. We're in the, in the mid to low nineties on all classes of mail and packages. And it's costing us in our current network to provide that level of service. But we're committed to doing so and we know what is impacting this service. Now I can, you know, lane by lane, pair by pair, that's very visible and we're, we're focused on that. And I think we'll continue to see service improve as we move forward with the new network. And that's gonna be location by location. Like we're going into Atlanta. Atlanta is usually 20, 25% below the performance of the rest of the nation. We're gonna fix all that and bring that up.
That's a big market that will drive you know, a few points on our service across the board and be more inviting to, you know, to the marketplace. So service, we're on our way. The rest? We wanna look at financial, right? So when I got here, we're gonna lose $160 billion over the next 10 years. And we had to take a hundred thousand people outta the organization to do that. We got Postal Reform Act passed, that was 50 billion of our plan, and we got it done. That will save us… That's a punt down the road. We eventually have to start paying that again you know, six, seven years from now. So we need to get busy on the rest of the stuff. One of the other elements of it was the pricing. I believe we had a defective pricing model for the last 15 years.
PRC - Postal Regulatory Commission - finally made a decision and mostly fixed that prospectively; didn't address the previous years, but we have some room in there. And we've been, we've been using that and that'll get us about $40 to $45 billion over the next 10 years to the good. The rest of it is well most of it is, is on us. We wanna get $35 billion out of our cost structure. This is a big year for this cuz it's the, you know, we first tried to stabilize our service, get the plan. Now there's demands on each aspect of our operations to get cost out and specific numbers. This is, you know, adult work now, right. And we are gonna be monitoring it and we have specific targets and you know, that should be helpful. Once we I see that happen, I'll be able to forecast out, you know, our ability to accomplish, you know, this stuff. And it's in all areas. It's, it's in delivery, it's in transportation, it's in the plant operations and so forth. And then we have new business: sales. I mean, we have to you know turn the sales around and get our fair share of the package business. And that's through the tune of $25 or $30 billion over the next 10 years. And I'm optimistic.
Karla Kirby:
That's great. So the Postal Service is going through one of the largest transformations in the nation, given public or private sector. Can you explain some of the larger elements of the transformation?
Louis DeJoy:
The way I look at it is, the way I looked at it when I came in here. I mean, we're an operational services entity, right? We, 95% of our people do physical distribution type of work, right? Most of the analytics and competencies of the support functions, technology, engineering and so forth, should be focused on that. And my view was when I came in here, we were not. We did not have a good organizational strategy to pull off what our mission was and to also compete with the competitive players that were out there. And we've had some great success in making that that transition, you know, that was not in favor of our operational metrics, how we ran things, how we looked at things.
And we've made significant changes in that. And we have had tremendous results in terms of simple things like, you know, plant schedules and paying attention to service and paying attention to cost and so forth. So those are the, the big, big things that I say are, you know, major transformational things that had to, you know, how we, how we organized to do our work and how our work is organized to be done,
Remember, we gotta deliver. The Postal reform act said, deliver mail and packages in an integrated network, right? Well, we don't have an integrated network. That's one of the things we're setting out to do. And that's a big, big transformation we'll be un undergoing, but I couldn't do without a better operating strategy with a better organizational strategy. How we operate, the logical sequencing of mail moves, mail and package movement and value added activities to the ultimate delivery to, you know, to the resident is very much what we're focused on. It is a little bit of a simple science, right? And that is, you know, a big part of the transformation.
Dale Parsan:
Well, let's talk about money. These things all sound great Louis, but how are we gonna pay for it? I know in the Delivering for America plan, we set out a goal of 440 billion of investment over that 10 year horizon. But, you know, with all the thought around transformation, could you talk to us about how it gets paid for?
Louis DeJoy:
So when I got here, what we were gonna run outta cash in about 90 days or something.
Was close, it was scary. And it's also very hard to make decisions in an environment like that. Today, we're sitting on, I think approximately $20 billion right now from various activities, you know, that we've by not losing as much, by getting postal reform, by working with the Congress and administration to get reimbursed for delivering during the pandemic and so forth. But I think our loss is about cut in half from 160 billion. We're looking at 70 billion over the next, you next 10 years. While that's good news, I still run outta cash in five years or something like that. So whether you run outta cash tomorrow, or five years from now, you still got a bad plan that you got to, that you have to deal with. But we gotta get it. And we got a plan to get it. And in the course of getting that, we throw off cash. In the plan it says we throw up $40 billion. So between the cash we have on hand and the 40 billion we throw off…
Dale Parsan:
Throw off? What do, what do you mean by that?
Louis DeJoy:
Cash generation from our operating. Between the two we're gonna be reinvesting about $40 billion into our network. We'll spend $15 to $16 billion over the next three years on capital and 40 over the 10 year plan. And it's gonna go in new vehicles. We have already committed 3 or 4 billion to new vehicles. We have the Congress appropriated 3 billion to try and nudge it, you know, to get us more, you know, this is separate from that 3 billion. And we're, we're looking at how we use that to be judicious. To me we need to spend the money in the right way to fill a mission. And so forth. And I've been working with many different constituents to make sure that we're on the right path on electric vehicle deployment because there is, you know, certain you know, risk of deployment and we still gotta deliver mail every day, right?
So that's, so that's important. But the, the network we've put, you know, hundreds of millions of dollars into new conveyor systems. We're putting, you know, billions of dollars into our technology over the next 10 years. Billions of dollars into our network with new facilities and upgrading the facilities and making them better for our employees, more suited for the function that they have. I mean, we probably have 2, 3 billion, $4 billion worth of deferred maintenance. So if I go into a building and wanna put 10 million in to put a conveyor in there, and I want this to be a long term place for us, I have to go back 10 years and look at all the deferred arrangements. It could be 20 million bucks. It could be 20 million bucks as we move forward. So, you know, and we have to do this to bring everything up to great.
You, look at the S&DC, we have a facility down in Athens, our first super delivery unit. You know, it's a smaller site, but this was a nice facility, was a plant at one time, had been, you know, not used for a long time, in a beautiful area, nice place. And we're gonna put, you know, we'll probably put $10 million into the facility, improve employee amenities, get ready for more vehicles being there, electric vehicles. It has a lot of amperage already there. So we have some good assets, right. We just need to aggregate them and deploy them in the, in the proper place and then bring them up to workable condition.
Karla Kirby:
So that is absolutely a great segue into my next question. You've touched on the infrastructure and the changes that we're making within the Postal Service. What can you say about the tangible impacts that our residential customers and our commercial customers will see?
Louis DeJoy:
Well, our commercial customers are already beginning to get excited about the just sheer performance of our service. And, and the affordability that which we're planning to bring. When you look at a first class package you know, a five day service as it moves across the country, that means it's some places it's one day and some places it's two days, and some places it's three days. And the regional aspect of distribution is becoming more prevalent in the marketplace. That is how people get their product there in two days. Not everybody wants to fly things, you know, know everywhere. And we're a big, big player in that. We have the best regional network coverage of anybody. Cuz we go everywhere every day. We just never organized for it. When we get through with the network change, you'll be able to at the new site in Atlanta, you'll be able to enter a package or a piece of mail at 7, 8, 9 at night and have it delivered the next day to 7-8 million people around the Georgia area.
And in two days, you know, 55 million people around the southeast. Right. That's kind of how the network is being designed. So there's tremendous opportunity and we are trying to be able to contract better, right? Trying to ease the burden of contracting that, that was very difficult with us. Right on, on all the shippers side, we're opening up local, USPS Local for small businesses. We're gonna have a big, big set of offerings for local businesses with USPS Connect Local where we're freeing up space in some of these delivery units, there's a lot of different things we can offer them even to be inside our network to ship, you know, to operate and ship their, you know, ship their…
Dale Parsan:
Product in the mainstream faster.
Louis DeJoy:
Yeah. Yep. And, and more cost effectively, we're really following the cost. We have a cost capacity type model that we're looking at. And if you fill up capacity it should be incremental, right? In terms of how we look at, so lots of commercial oriented creative activities between technology operations and how shippers use our network. For the individual, I think long term, for the resident, they're gonna get good service. They're gonna get cost effective delivery. I think as we get more prevalent in the marketplace, hopefully, you know, I don't think everybody wants to see 50 trucks running up and down their neighborhood streets. And therefore I think what all these different opportunities, we become a market maker because we're reliable and we are affordable. Right. And then the market will also figure out how to use, how to use that. So I'm excited about it.
Dale Parsan:
Great. Well, sir, you touched on it a little bit, but I've got a final question for you. And it's simply put, what's your vision for the future role of the Postal Service in America?
Louis DeJoy:
My vision is, number one, to fulfill the requirements of the law. There is a law that says, especially now we have to deliver to 163 million addresses six days a week in an integrated mail and package network. So my vision is to make us really, really good at doing that. When I say good, it’s reliable and cost effective, right? Because the other part of the law is, and we have to cover our cost, right? And those two things should be aligned. I should be able to look at the mailers like I did, and I say I gotta raise the prices to whatever, whatever the price raise is, but they should also know and feel that we're operating efficiently. Right? And, you know, there's a whole lot outta balance like that. We should have been raising prices more over the last 15 years. We haven't. And we should have been running the place better over the last 15 years and we haven't. Right. My vision is to make that happen. And I believe that in the marketplace we should be like the most used. That that's what I want be. It's not that creative
Dale Parsan:
Like you said, it's not rockets science.
Karla Kirby:
Not reinvent the wheel. So when you think about it, you talked about us already delivering to 163 million addresses each year. What is one thing you would like to share with our customers for holiday season?
Louis DeJoy:
Well, anytime I speak to customers, especially during the holiday season, first thing I wanna say is, thank you for your business and happy holidays, but with regard to United States Postal Service, use us. Use us because we're gonna be extremely reliable and affordable. And we're gonna have a successful peak as we did last year. For a vast majority of the population, we're over 95% in terms of delivering packages across all our products.
Dale Parsan:
So we're here, we're ready, we can do it.
Louis DeJoy:
Absolutely.
Dale Parsan:
Louis DeJoy:
Yeah, it's great, to be with you both. And Karla, welcome. This is the first time I've you know, interacted with you on a set. And Dale you’re looking a little older. So when you first started this.
Dale Parsan:
Gray hair is popping up.
Louis DeJoy:
Yeah. How you enjoying doing this?
Dale Parsan:
You know, it's a wonderful, wonderful opportunity to leverage my expertise across the organization through my normal job, and then bring it here to help share with the audience
Louis DeJoy:
Who's been your best interview?
Dale Parsan:
Oh gosh. You know, there's, there's been Chief Barksdale. I'm kidding. It's you,
Louis DeJoy:
Very good.
Karla Kirby:
Well definitely thank you for joining us. And don't be a stranger. You gotta come back.
Louis DeJoy:
Invite me back. I got a lot to say.
Dale Parsan:
Thank you, sir.
Louis DeJoy:
Thank you.
Dale Parsan:
All right everyone, it's time for Did You Know. In this segment, Karla and I share some interesting details about the Postal Service that most people probably don't know,
Karla Kirby:
And I'll take the first one. Dale, did you know that November 15th, 2022 marked the 150th anniversary of the first time an African American woman is known to have been appointed to the postmaster position?
Dale Parsan:
I did not know that. That's pretty cool.
Karla Kirby:
That's right. An 1872 Anna M. Dumas was appointed postmaster of the Covington, Louisiana Post office.
Dale Parsan:
That's pretty groundbreaking stuff.
Karla Kirby:
It was for that time. She held the position until 1885 and her service paved the way for other African American postmasters. Like Minnie Cox. Minnie was the first black woman postmaster in Mississippi, starting in 1891, and was one of the most well known postmasters of her time. In 1902 some white citizens of Indianola demanded that she resigned, so the position could be given to a white man.
Dale Parsan:
And how did she respond?
Karla Kirby:
She ended up making national headlines when President Theodore Roosevelt refused to accept her resignation. Instead, he suspended service at the Indianola post office and ordered the Attorney General to prosecute any citizens who threatened Minnie with violence. After her time with up Postal Service, Minnie went on to open a bank and insurance company to make sure that those types of services were available to African American residents.
Dale Parsan:
That's a pretty remarkable woman.
Karla Kirby:
She really was.
Dale Parsan:
Speaking of civil rights, Karla, did you know that the first African American to earn the Medal of Honor was a letter carrier?
Karla Kirby:
I had no clue. Definitely tell me more.
Dale Parsan:
Yeah, it was later in their life. So his name was William H Kearney, and he was born in Norfolk, Virginia. In 1840. He spent most of his childhood as a slave in Norfolk. Eventually William and his family made their way to Massachusetts and freedom. In 1863, when he was 23 years old, William enlisted in the Union Army. He joined the 54th Massachusetts Infantry Regiment, the first regimen of black troops raised in the North.
Karla Kirby:
So what was he most remembered for?
Dale Parsan:
While he's best known for his role in the charge on Fort Wagner outside of Charleston, South Carolina. Anyone who's seen the movie Glory with Morgan Freeman and Denzel Washington will be somewhat familiar with what happened there. When the unit’s flag bearer was shot during the battle, William retrieved the American flag himself and continued to march it forward despite his own wounds.
Karla Kirby:
So how did he become a letter carrier?
Dale Parsan:
Well, after he was discharged from the Army in 1864, he returned to New Bedford, Massachusetts. In 1869 was appointed as one of the city's first letter carriers. He held that position for nearly 32 years and was a founding member of the New Bedford branch of the National Association of Letter Carriers. He received the Medal of Honor in 1900 for his Civil War bravery. And with that, that wraps up another segment of Did You Know,
Karla Kirby:
Great information as always,
Dale, What a great conversation with the PMG today.
Dale Parsan:
It's always a nice treat to have him take some time out of his schedule to come down and talk with us.
Karla Kirby:
It is, and one of the things that he said definitely resonated with me about the holidays season: The fact that we're here, we're ready, and we deliver.
Dale Parsan:
Great message for all of our customers across the nation.
Karla Kirby:
Absolutely.
Dale Parsan:
For me, I'm a big DFA nerd. I really enjoy learning about the updates. And, and for me, it always comes back to investments. The fact that we have made this promise that we're going to invest $40 billion. And to hear him talk about the various projects and areas of post service that he's already slated with the executive leadership, billions and billions of dollars that are ready and primed. It's, it's really inspiring. As, as somebody who works here, it's great to know that we are actively making decisions in our future.
Karla Kirby:
Absolutely. And as we continue down Delivering for America, I think we're going to see some great things happening. So that's all for this episode of Mailin’ It. Don't forget to subscribe to Mailin’ It wherever you get your podcasts. To make sure you don't miss the next episode and follow along on Instagram @USPostalService, Twitter @USPS, and on Facebook.