Assessing the fate of USPS as DeJoy signals departure

Louis DeJoy surprised many on Tuesday when he announced that he would be stepping down as Postmaster General of the U.S. Postal Service. While no timeframe was given, in a letter to the USPS Board of Governors, DeJoy said “it is time for them to begin the process of identifying his successor.”

DeJoy was named the 75th Postmaster General in May 2020, replacing Megan Brennan, who served in the role from 2015 until May 2020.

For more on DeJoy’s legacy, read: USPS begins search for new Postmaster General as Louis DeJoy signals imminent end of his tenure

With DeJoy’s tenure entering its final days, several experts weighed in on the fate of the postal service in interviews with Jeff Berman, editor of Supply Chain Management Review’s sister publication Logistics Management.

Rob Martinez, founder of San Diego-based parcel consultancy Shipware, told LM that under DeJoy’s leadership, the USPS has undertaken significant financial and operational reforms, leading to some improvements in financial metrics and viability. But conversely, he noted that these changes have also led to service delays and Post Office closures, particularly in rural areas, higher postage costs (which many argue has contributed to volume declines in First Class mail), and customer dissatisfaction and distrust.

“It will be interesting to see which candidates will be considered by the USPS Board of Governors to replace DeJoy,” said Martinez. “After a tumultuous five years of constant change at the hands of an outsider, the board may again consider individuals with a background in postal operations.”

And Gordon Glazer, independent parcel consultant, USPS specialist, explained that there are more than a few questions to address as DeJoy is set to soon leave the USPS, including: What will his successor do with the existing Delivering for America (DFA) plan (he said that the Postal Regulatory Commission believes it is fundamentally flawed)?; Can any of the changes be salvaged? Is there a way to make the DFA plan workable? And will the new administration continue the focus on profits over service performance?

“The USPS must remain relevant and competitive,” said Glazer. “To be relevant, it must maintain consistent service performance. The price to ship via USPS won't matter if the service is unacceptable to the buyer. As service performance degrades, volume drop is inevitable. As volume decreases, it becomes iteratively more expensive to move each piece, further straining revenue. This is the beginning of a ‘death spiral,’ as subsequent price increases and service degradation will be necessary to balance the drop in volume, thus perpetuating the spiral.

It is my hope that the new leader will focus on returning the USPS to relevancy by focusing on service performance instead of profits. In the short term, I would reverse the recent changes implemented to reduce the workshare from consolidators. Consolidators are not the enemy; rather, they are collaborators in the mission to drive postal volume and relevancy. They use out-of-the-box thinking and private money to drive innovation and service performance, leveraging outside resources while maintaining a positive client experience. It works well for all stakeholders.”

As for potential replacements for DeJoy, Glazer said that three solid, very qualified candidates have been suggested, including Robert Taub, current vice chair of the Postal Regulatory Agency, with Glazer observing that the Postal Regulatory Commission (PRC) stated in an advisory that the USPS will see little benefit and that the new Regional Transportation Network (RTN) is unlikely to create a more efficient network. The second candidate suggestion is Thomas Day, said Glazer. Day is also a PRC member and former USPS executive. And the third candidate suggestion cited by Glazer is James Cochrane, former chief marketing officer who currently heads the Package Shippers Association.

“I like all three,” said Glazer. “If I had to guess, I believe the current administration will promote Mr. Cochrane due to his strong connections to all stakeholders and because he is the only one of the three not in a regulatory position.”

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