New Postal Service leader lends support to controversial modernization plan

In his first appearance before the U.S. Postal Service Board of Governors Thursday, newly minted Postmaster General David Steiner offered his support to a controversial modernization plan crafted by his predecessor and criticized by the Postal Regulatory Commission, as well as several members of Congress. 

Ahead of the presentation of the USPS’ third quarter financial results, Steiner, who officially became the 76th postmaster general on July 15, said an early assessment of the Delivering for America plan showed it was the right policy to improve the profitability of the service. 

“Since my first day as postmaster general, I’ve been evaluating the strategies and programs of the strategic plan that’s in place. Although only three weeks into my tenure, my initial conclusion is that the 10-year plan positions the postal service to be on the right path,” he said. “The strategy is sound, now we have to execute.”

The Delivering for America plan, formulated by former Postmaster General Louis DeJoy prior to his announcement in February that he was stepping down, is 10-year strategy centered on improving the postal service’s balance sheet and updating its operations to make it more competitive. 

But the plan faced pushback from postal regulators, stakeholders and lawmakers on Capitol Hill after four years had netted missed profitability goals, multiple price increases and declining delivery performance. 

Most of the controversy centered on DeJoy’s plan to consolidate mail processing operations into 60 mega-centers around the county, concentrating the final stage of mail sorting at centralized centers rather than closer post offices and leaving some mail to sit overnight for collection the following morning.

Steiner, a former Waste Management CEO and FedEx board member, didn’t elaborate on the strategy’s path forward, but said that it had brought the USPS closer to private sector logistics practices. 

“Both the pricing and product strategies have improved our competitiveness,” he said. “We will continue to aggressively pursue those strategies, but we will need to do more to fully unlock the strong revenue growth for the long term. 

He added that USPS would strive to consistently align its costs to revenue and emphasized improving service delivery as a way to build business and reinvest into the service.  

“We face significant challenges in the dynamically changing business environment that have put significant stress on our business model and have had a negative impact on the organization, but those obstacles from the past should not deter us from achieving financial sustainability.”

USPS reported a net loss of $3.1 billion for the third quarter on a total operating revenue performance of $18.8 billion, up from $2.5 billion the year prior and relatively flat revenue. The service’s loss was driven by $1.5 billion in expenses not controlled by management —  such as pension liabilities, federal compensation requirements and other factors — as well as $1.6 billion in controllable expenses, up from $1.1 billion a year prior. 

Officials said the controllable expenses were attributable to workers’ compensation non-cash expense and unfunded pension liability amortization expenses.