PRC chairman Kubayanda says USPS is in a ‘nosedive’

By Allen Abel, Washington Correspondent

The productivity of the United States Postal Service is in a “nosedive ... that’s stunning ... and that cannot continue forever,” Michael Kubayanda, chairman of the Postal Regulatory Commission (PRC), told Linn’s Stamp News May 2 in a wide-ranging interview at the PRC headquarters in Washington, D.C.

A significant deterioration in service performance, even more than the twice-a-year postage rate increases that are being implemented under Postmaster General Louis DeJoy’s Delivering for America plan, is the primary source of complaints to the PRC from members of Congress and the general public, Kubayanda said.

The Postal Service reported in late January that only 84 percent of first-class mail was being delivered on time against the agency’s own reduced standards, a nearly 2 percent decrease from the previous fiscal quarter.

Standstills at sorting centers in Houston, Texas; Atlanta, Ga.; Richmond, Va., and other cities have drawn the ire of congressmen and customers alike.

“I have noticed, and I’ve heard from friends, colleagues and so forth, some of whom work in public policy, that there’s been a spike in really noticeable problems,” Kubayanda said. “You’re expecting something in a reasonable period of time. And then items get lost, or it takes maybe 17 days when you’re anticipating two days.”

“I have a close family member who sent a check from Williamsburg, Va., that got to Raleigh, [N.C.], two months later,” Ashley Poling, a member of the PRC, said during the interview.

“My own Christmas cards, I have to admit, I was a little late sending them this year,” Poling recalled. “I sent them from my family’s house in Virginia and they got to my friends in [Washington, D.C.,] a month later. So, you know I’m not alone.”

“You can’t miss it, it is acute, and it’s a huge problem,” Kubayanda said. “You’ve heard about the issues with medications for veterans, medical tests being late, right?”

“These are all things that we have warned about, and they need to be addressed,” Kubayanda said. “It’s not just numbers on a spreadsheet at this point. It’s actually affecting real people.”

The interview came one week after the PRC filed an official notice demanding that the Postal Service show cause why it should be permitted to continue the centralization of mail sorting away from individual post offices in favor of super-sized regional centers, such as the gridlocked new facility in the Atlanta suburb of Palmetto, Ga., that was the main focus of a heated Senate inquiry in late April.

“Although the Postal Service states that the [Delivering for America] Plan initiatives will result in efficient operations and improved service once the changes have been implemented, the Postal Service has not provided any analyses, data, or modeling showing that these changes will improve service,” the PRC filing stated.

A spokesperson for the Postal Service waved off the PRC’s demand, saying, “At this stage we are not required to seek an advisory opinion from the PRC regarding the implementation of the Delivering for America Plan initiatives that we have pursued thus far.”

“They suffered a loss of $6.5 billion in the last fiscal year, in the year where they projected they would break even under the Delivering for America plan,” Kubayanda told Linn’s. “So they’re off by $6.5 billion, and this year is not looking great. We’ll see what the results are. But that’s a concern for anyone who cares about the future of the postal system.”

“They’re having those types of losses,” Kubayanda continued. “And you think about how all these things play out together, the service levels, the prices, the finances, and whether the system is headed in the right direction collectively.”

Recent months have seen a marked lack of harmony between the PRC and the Postal Service, which is headquartered a few blocks to the southwest and sets the PRC’s budget.

In fall 2023, the Postal Service rejected a PRC request for an increase to its operating budget, leading Kubayanda to complain that “Congress created the Commission to provide transparency and accountability of the Postal Service. This budget cycle appeared to reverse the agencies’ statutory roles.”

“I do raise an eyebrow at some of the statements that come out of L’Enfant Plaza [USPS headquarters], about how harsh oversight is,” Kubayanda said. “To me, they’re a public entity. And it’s a public entity with a monopoly.”

“In the American kind of free-market-oriented system, the thought is that competition is the best regulator,” Kubayanda said. “So usually, where there is a lack of competition because there’s a monopoly, regulators needed to protect against unfair price increases, or degradation in service or abuse of the monopoly position. Of course there’s going to be disagreement over those issues. But it’s a strange time to say you don’t need a regulator.”

“I think there’s something healthy about having some tension between a regulator and the regulated entity,” Poling said. “It’s been put out there in the community in terms of that there is sort of this feud between [the USPS and PRC]. But I think that it would be sort of odd if [the USPS] liked everything we were doing.”

Kubayanda was asked if he considered that the postmaster general’s latest request for a 5¢ increase in the price of a forever stamp would meet his definition of “unfair.”

“We are evaluating their request now,” he replied. “We’re limited in what we can say about issues that are before us. And so all I can say is that we are aware of the discussions about prices. We are considering the price increase request under the statute, under the law, and under our regulations.”

“Do you wish you had more authority and leverage?” Kubayanda was asked.

“That’s a difficult issue,” Kubayanda said. “Every five years, we make legislative recommendations. We have not necessarily gone out and said we should have more power. I do think that if you hear the frustrations that are being expressed by members of Congress, asking why the Postal Service is able to go ahead with some of these issues and isn’t taking into account all the concerns, there needs to be some change.”

“Maybe our role should be potentially stronger, but that’s something that Congress has to decide,” Kubayanda said. “But I think it’s something that absolutely should be looked at.”

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