Why Capital and Flexibility Matters

http://www.gwinnettdailypost.com/localnews/headlines/Post_office_gets_80K__in_penalties_112641144.htmlNews stories about service or safety failures seem to pop up nearly weekly.   Two stories today illustrate the need why the financial problem may be even greater than the Postal Service's inability to pay its bills at the end of the year.

• The Lima News reports of the problem the Postal Service is having in getting mail delivered on time in west central Ohio.  The story describes  mail arriving for delivery late from the processing plant in Toledo which caused carriers to be paid waiting for its its arrival and then forcing delivery well into the evening.   The story also describes a number of instances in which advertising mail is delivered well after the in-home date.   Most telling is this quote from a retired Lima letter carrier Michael Wright, “In Toledo, they don’t have room. It’s chaotic.”
  
  How could this be fixed?   One option would be to expand the plant in Toledo and its automation capabilities to handle the increased volume.   This would require capital expense that the Psotal Service does not have.  A second option would be a better early warning system that allows senior management at the Chief Operating Officer level to know when a plant is receiving more volume than it can handle so that appropriate changes in sort plans and distribution schemes are made so that mail is delivered on time.    A third option would be flexibility that would allow shifting mail from a plant that has back-ups to one that has more capacity on an ad-hoc basis or permanent basis.  There are three plants near Lima that could take some or all of the mail that Toledo (i.e. Columbus, Cincinnati or Fort Wayne) appears to have difficulty handling.  Finally, management needs greater flexibility for part-time and temporary employees to allow local managers to bring in extra staff on short notice during peak months, or days of the month.
  
  As the proportion of mail that is advertising increases, the importance of timely delivery increases.   Mail demand shifts from an "as soon as promised" delivery standard of First Class mail to a "specific in-home date" requirement of advertising, periodical, and parcel mail.  Having sufficient operating capacity for peak periods and flexibility to handle variable levels of volume requires both increased capital and flexibility in labor agreements and management thinking.
  
• Occupational Health and Safety News reported that the Postal Service faces $238,000 in fines for safety violations in Central Massachusetts Processing and Distribution Center in Shrewsbury, Mass.  Just five days earlier, The Gwinnett Daily Post reported that the Postal Service recieved $80,000 in fines for similar safety violations in the Dultuth Georgia facility.
  
  These are just the latest of a set of fines the Postal Service has received for electrical safety and training issues in facilities across the country.   Fixing the problems required requires cash to make necessary repairs, provide proper safety equipment, and provide proper training to ensure that all safety procedures are followed and safety equipment is used.   Again, the shortage of cash most likely causes the Postal Service from spending the funds that would be necessary to prevent these fines. 
  
  The OSHA safety fines raise another question, that is particularly important given how much of the mail is sorted on automated equipment all of which requires electrical power.   Could the problems that cause safety violations be the canary in the coal mine in regards to equipment downtime that could affect service quality and the competitiveness of the Postal Service as a means to handle financial transactions and deliver advertising?