NALC FACT SHEET

POSTAL SERVICE CONTRACTING OUT

NALC Calls for Congressional Oversight of USPS Outsourcing: The Postal Service is seeking to dramatically expand the practice of contracting out delivery services across the country. NALC believes that the growth of so-called Contract Delivery Service not only threatens the jobs and incomes of America’s 325,000 city and rural letter carriers, but also the long-term viability of the Postal Service. It believes that Congress should closely scrutinize this practice in the course of fulfilling its oversight function. NALC stands ready to assist both the House and the Senate as it undertakes this work.

Background: The United States Postal Service is the second largest employer in the country. It provides excellent and highly affordable universal postal services. Today it delivers twice as much mail to tens of millions more households and businesses than it did when it was created 35 years ago, but with significantly fewer employees. Efficiency gains from automation and new business processes have eliminated nearly 100,000 jobs over the past decade alone. Thanks to the hard work of more than 700,000 workers, the U.S. Postal Service is the most efficient postal service in the world. And thanks to theft unions, these workers earn solid, middle-class wages and have decent pension and health benefits. In contrast to the nation’s largest employer, Wal-Mart, the USPS is an exemplary employer.

Unfortunately, postal management is placing this success and the future of the Postal Service at risk by turning to outsourcing as a key business strategy for its core function. Contracting out the delivery of mail is increasingly being promoted not just in the most rural areas where Highway Contract Routes (HCR) have long been an option, but also in urban and suburban areas. In recent years postal management has initiated a major effort to promote contract delivery, and in 2006, the USPS renamed the HCR program Contract Delivery Service (CDS). Delivery managers have been instructed to favor CDS using contract employees over delivery by career city or rural letter carriers for all new deliveries.

The growth in CDS has been dramatic in many parts of the country. In the Southeast Area, for example, the number of homes and businesses served by contractors has exploded in recent years, rising by 34% since 2002. Over that same period the number of city and rural delivery points grew just 6%.

NALC Opposes Outsourcing of Delivery Jobs: Outsourcing delivery is contrary to the broad public interest -

* By using contract delivery workers, the Postal Service has bypassed the normal recruitment and hiring processes that ensure that only qualified and trustworthy people are entrusted to handle Americans’ mail. In so doing, it is also undermining the federal policy of granting preference to veterans of the Armed Services for postal jobs.

* Using contractors undermines the accountability of the Postal Service. CDC contractors often sub-contract their delivery work to unknown individuals. Neither customers nor the Postal Service can know who is responsible for service problems or delivery concerns.

* The CDS contracting process lacks transparency; wage levels are reportedly less than 50% of those enjoyed by career letter carriers, but often payments and fees paid to contractors for “vehicle expenses” and “overhead costs” eat up whatever labor cost savings might exist. The details of CDS contracts are subject to little or no scrutiny.

Outsourcing delivery threatens the sanctity and security of the mails:

* Recruited with minimal screening, CDS contractors and their unscreened sub-contractors open the possibility that convicted felons, identity thieves and other undesirable workers will gain access to Americans’ mall and their mail boxes.

* The danger of bio-terrorism through the mails was demonstrated with the anthrax attacks of 2001. Granting access to the mail stream to an unaccountable, low-paid work force foolishly risks the security of the mails.

* Outsourcing mail delivery to contract workers weakens the ability of the Postal Inspection Service to prevent, investigate and prosecute mail theft, mail fraud and other illegal uses of the mail (for example, child pornography, etc.).

Outsourcing delivery is a foolish business strategy:

* Successful businesses do not out-source their core functions. Professional letter carriers are the public face of the Postal Service. The public’s trust in letter carriers is an essential business asset of the Postal Service.

* The success of programs like Customer Connect, which uses city letter carriers as sales agents for postal products, and techno logical strategies such as intelligent Mail require highly skilled and strongly motivated letter carriers. Low-paid, unskilled, here-today- gone-tomorrow contract workers would doom such programs and strategies to failure.

* Outsourcing the last mile would undermine the basic trust mailer and patrons have in the postal service and backfire; volume and revenue would fall, offsetting any short-term cost savings.

Outsourcing undermines the public service orientation of the Postal Service:

* Letter carriers bring tremendous good-will to the Postal Service through the intangible contributions they make to their communities. Programs such as Carrier Alert, whereby letter carriers look out for the well-being of elderly and disabled Americans, and the NALC National Food Drive would atrophy with the spread of Contract Delivery Services.

* Contract workers would not and could not be counted on to go the extra mile for the public interest. How many CDS workers would fulfill the commitment made by the NALC, the USPS and the Department of Homeland Security to distribute vaccines and medicines in the face of a national emergency. The fulfillment of that commitment, made in the Cities Readiness Initiative, will depend on having the most dedicated and professional letter carriers possible.

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