40 Years Ago

Tags: history, Kappel Commission, postal service

old Post Office Department seal with 1969 written over it

We all know the Postal Service is going through rough times right now. Sometimes, when a situation is difficult, it’s useful to look to the past for perspective. Forty years ago today, there was no Postal Service (and no Office of Inspector General). The Post Office Department was 5 months away from an unprecedented strike, and 15 percent of the Postal Service’s FY 1969 revenues came from appropriations. Mail volume was 82 billion pieces. There were 739,002 employees and 43,220 post offices (including stations and branches).

Three years earlier, mail operations at the Chicago Post Office had broken down for three weeks leading to a backlog of 10 million pieces. Sixteen months earlier, the President’s Commission on Postal Operations, known as the Kappel Commission, had released its report (Click here for the first part of the report). The first line read “The United States Post Office faces a crisis.” The report described several problems:

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Customers were dissatisfied with inconsistent mail service following a period of rapid volume growth. Moreover, the Post Office Department had little knowledge of what products its customers wanted.
Employees experienced antiquated personnel practices, poor working conditions in many facilities, and limited opportunities for training or advancement. More than 80 percent of employees started and ended their careers at the same grade level. Some opportunities required political connections.
The system of supervision was inadequate with supervisors isolated from management decisions, and relations between labor and management were poor.
The Post Office operated at substantial deficits financed by the government, and there was a chronic shortage of funds for capital investment.
Productivity was low as “[in] most offices men and women lift[ed], haul[ed] and push[ed] mail sacks and boxes with little more mechanical assistance than the handcart available centuries ago.”
Pricing was based on inaccurate cost systems, and the rates were set by Congress.

The Kappel Commission diagnosed all of these problems as manifestations of a single root trouble: Management had no authority to manage. Their proposed solution was a government corporation.

The Postal Reorganization Act of 1970 (PRA) became law the August following the strike. The PRA did not include all the Kappel Commission’s recommendations, but they were highly influential. The Post Office emerged as a new, much more independent Postal Service.

historical mailroom

Are there any lessons for today in the problems of 40 years ago? Postal operations were losing more money in 1969, but volume was growing. Are prospects better or worse today? What will future commentators say about the Postal Service 40 years from now?

This topic is hosted by the OIG’s Risk Analysis Research Center (RARC)

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12 Responses to “40 Years Ago”

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10
norm Says:
November 30th, 2009 at 11:23 am
Hmm… 15% of revenue came from taxes in 1969. if that were true today, the Pstal Service would have received about $10-11 billion in payments last year, in which case, they would have been wildly profitable even in this very tough economy and with all of the mandated payments they much make.
All in all, it seems the current USPS — with record service and satisfaction — is doing quite favorably compared to the ’69 version
9
badfire Says:
November 25th, 2009 at 9:36 am
The past, although very different, is important but with today’s environment the Postal Service needs to change with the times. The Postal Service is suppose to operate like a business, right? Most businesses look to be innovative or provide cutting-edge products. The Postal Service doesn’t exactly position themselves to do so. In addition to automation and streamlining the Postal Service should look into at least providing what is already available. Can the Postal Service be another Zumbox? And for those who want to hold onto to their Post Office so they can have somewhere to go. Maybe a local coffee shop can become the new internet cafe so you can meet and greet while reading your paperless mail. Just one of many ideas the Postal Service could look in to.
8
Tricky Dick Says:
November 24th, 2009 at 11:14 pm
I started with the PO in 1969, and it was whole different world back then. The system was pretty much the way it was in Ben Franklin’s time, but the mail got out. It was physically much harder than today and the PO was one of the lowest paying federal jobs. With congress controlling the purse strings there was no incentive for change. It seemed like there was an attitude of “if it was good enough for Franklin 200 yrs ago its good enough for us”. AS a matter of fact PO management was anti-technology at all levels including HQ. I think the USPS was about the last gov’t agency to get computers. I remember, a little over 20yrs ago, they installed computer terminals around the floor but they were never used and then removed.

It all started to change after after the 1970 act kicked in. A lot of experimentation went on and some was disastrous and comical. Like the SPLSM and all the various cage type before they settled for the GPMC and ERMC. Before the MM tray and 775 tub ALL mail was shipped in sacks and pouches. There were no long haul over the road HCR’s all the long trips were on trailers carried piggy-back on railroad cars. Since the railroad charged by the foot and not weight the “pigs” were loaded floor to ceiling. We even used to go to the railroad station and unload mail off of boxcars onto trucks.

Today it is a lot easier, some of the newbies of today might not have been able to handle “the good old days”. While all the new equipment of today has made things easier, it is not being used to its full potential. While management has got over their resistance to technology, they have not figured out how to manage it. They will short staff, run bad mail, and etc in order to make “the number”. Almost like the old days practice of weighing in the same mail several times.

While it is true that some cost cutting is needed it is not the only answer. There MUST be an increase in revenue. There seem to no real effort being put into trying increase revenue. All the emphasis has been on cost cutting, shorter retail hours and less services, they seem to be trying to drive business away. The upper levels (HQ, Area, & District) are not giving the installation level any incentive to increase revenue, they only pressure them to make their budget and numbers.

Glad I took the incentive and got out!
7
Its Obvious Says:
November 24th, 2009 at 10:18 am
The problem today is obvious. Top management takes no responsibility in their failed projects, e.g. DPS & FSS. After spending billions upon billions of dollars where did the “savings” go?
Another big problem is the lack of accountability on management’s part. They continue to violate collective bargaining agreements’ leading to hugh greivance settlements with no manager taking responsibility. EEO and MSPB awards are in the millions of dollars. The same people committing the same acts and yet are allowed to maintain their position causing more money to go down the drain. If the OIG was serious they would investigate the managers causing this loss.
6
Anonymous Says:
November 24th, 2009 at 6:24 am
The p.o must cut cost 5 days and the union must become
pro p.o. instead of nickel and dimeing the p.o.looking for free money.
5
Harold Hankins Says:
November 23rd, 2009 at 6:20 pm
I agree with awahba that the best chance for USPS to gain volume is the shipping market, particularly small parcels. Currently the USPS rates are competitive or better than UPS and FedEx for small parcels (say less than 10 ounces or so). However, USPS delivery times are not competitive. UPS and FedEx deliver ground anywhere in the continental US in 7 days or less, 50% of our USPS First Class parcels take greater than 2 weeks. By the time USPS delivers the package a lot of the customers have decided that the shipper never shipped and initiated charge-backs with their credit card companies.
4
vinnie Says:
November 23rd, 2009 at 5:13 pm
There are some things in a society that government should be responsible for delivery of the mail is one. The government should “bail out” if you will the USPS. After all automakers and especially the banks were given taxpayers money to operate on. Congress should remove their heads for the sand and fund the USPS instead of making ridiculous demands that cannot be met. It would be a disaster to let just anyone deliver the mail. For years congress used the postal service as a cash cow. It is now time for congress to help. Many people do not use electronic communication and depend on the postal service. America as a society just as other countries must have a postal service. Regardless of the cost.
3
awahba Says:
November 23rd, 2009 at 4:19 pm
There is no hope for regaining the ordinary mail volume, however Postal Service should take creative methods to gain bigger share of the shipping market and being very competitive, since this market is the promise future because the growing online trade.
2
Skippy Says:
November 23rd, 2009 at 12:23 pm
It’s funny how many things do not change over 40 years. But one thing that has changed is management systems. In 1969 a top down autocratic management system may have been the best thing, but now bottom up management systems have been proven to be much more successful. You have to look no further than the automakers. As much as I hate foreign autos, their bottom up management systems have allowed them to excel in quality and innovation. This is where the Postal Service needs to change. They say that they listen to employee ideas, but it is nothing more than lip service. If they would have listened to their own people, there is a good chance that they would not be in the pickle that they are in right now. Let management answer to the employees like they do in a successful bottom up company.

Also, the diversion of mail to electronic media is here for good. Yes, there were other innovations in the past that threatened mail, but every time, there were still certain things (like bill paying and tax filing) that could only be done via mail. This is the biggest difference in the problems we have now compared to 1969.

If the national healthcare system were to pass, this would be a unique opportunity for the Postal Service to diversify, an opportunity that wasn’t there in 1969. Use to Postal Service for some of the services of a healthcare system (like paperwork, signups and so on). Regardless of how you think about it, this could be an extra stream of revenue that could offset the loss of revenue due to electronic media.
1
jrkakapastateradio Says:
November 23rd, 2009 at 10:30 am
Well, there was not a Board of Governors either…

So, last week, when Julie was passing out the annual
report, and the elephant in the room turned a very
deep shade of 3.8 red, on a scale of 4, how did the
crumpets and coffee taste?

The results of which reflected strategic cost saving initiatives, and a significant compliment
reduction, but, the economically driven mail volume
results.

Which, in my humble opinion were conceivably less worse than our economic indicators would reflect.
But, look out for this next quarter!

History reveals that technology changes history.
Gatlin, 88mm cannon, the sextant, norton, radar, Emc 2, star wars, sdi, or penicillin to name a few…

Look no further for your answer….. Like Churchill
did.

I’m going to stop this for a while, thank you for the opportunity to submit my opinions. Good Luck.