    [Senate Hearing 118-518]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 118-518

                      OVERSIGHT OF THE U.S. POSTAL SERVICE
                     UNDERSTANDING PROPOSED SERVICE CHANGES

    =======================================================================

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                               HOMELAND SECURITY AND
                               GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                DECEMBER 5, 2024

                                   __________

            Available via the World Wide Web: http://www.govinfo.gov

                           Printed for the use of the
            Committee on Homeland Security and Governmental Affairs

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                    __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    57-738 PDF                  WASHINGTON : 2025

    -----------------------------------------------------------------------------------

            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                       GARY C. PETERS, Michigan, Chairman
    THOMAS R. CARPER, Delaware           RAND PAUL, Kentucky
    MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
    KYRSTEN SINEMA, Arizona              JAMES LANKFORD, Oklahoma
    JACKY ROSEN, Nevada                  MITT ROMNEY, Utah
    JON OSSOFF, Georgia                  RICK SCOTT, Florida
    RICHARD BLUMENTHAL, Connecticut      JOSH HAWLEY, Missouri
    LAPHONZA BUTLER, California          ROGER MARSHALL, Kansas

                       David M. Weinberg, Staff Director
             Christopher J. Mulkins, Director of Homeland Security
            Annika W. Christensen, Senior Professional Staff Member
               William E. Henderson III, Minority Staff Director
                  Christina N. Salazar, Minority Chief Counsel
                      Andrew J. Hopkins, Minority Counsel
                         Laura W. Kilbride, Chief Clerk
                       Ashley A. Gonzalez, Hearing Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Peters...............................................     1
        Senator Paul.................................................     2
        Senator Carper...............................................    12
        Senator Hassan...............................................    14
        Senator Blumenthal...........................................    17
        Senator Rosen................................................    20
        Senator Ossoff...............................................    22
        Senator Hawley...............................................    25
        Senator Marshall.............................................    28
    Prepared statements:
        Senator Peters...............................................    33

                                   WITNESSES
                           THURSDAY, DECEMBER 5, 2024

    Louis DeJoy, Postmaster General and Chief Executive Officer,
      United States Postal Service
        Testimony....................................................     4
        Prepared statement with attachments..........................    35

                                    APPENDIX

    Senator Blumenthal's photo.......................................   121
    Senator Hawley's letter from Missouri Farm Bureau Federation.....   122
    Statements submitted for the Record:
        Envelope Manufacturers Association...........................   123
        Keep US Posted...............................................   125
        National Association of Postal Supervisors...................   129
    Responses to post-hearing questions for the Record:
        Mr. Dejoy....................................................   135

                     OVERSIGHT OF THE U.S. POSTAL SERVICE:
                     UNDERSTANDING PROPOSED SERVICE CHANGES

                                  ----------

                           THURSDAY, DECEMBER 5, 2024

                                         U.S. Senate,
                               Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:06 a.m., in
    room SD-342, Dirksen Senate Office Building, Hon. Garry Peters,
    Chair of the Committee, presiding.
        Present: Senators Peters [presiding], Carper, Hassan,
    Sinema, Rosen, Blumenthal, Ossoff, Butler, Paul, Johnson,
    Lankford, Romney, Scott, Hawley, and Marshall.

                 OPENING STATEMENT OF SENATOR PETERS\1\

        Chairman Peters. The Committee will now come to order. We
    are coming together at a very important time for the U.S.
    Postal Service (USPS) where postal workers just successfully
    delivered ballot mail during a busy election season and are now
    ramping up for a peak holiday season. Postmaster General (PMG)
    shared some numbers for the election mail. I think you will
    probably talk about in your testimony here today.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Senator Peters appears in the
    Appendix on page 33.
    ---------------------------------------------------------------------------
        But certainly, a very busy time, and I certainly appreciate
    Postmaster General DeJoy for being before us here today to
    answer questions about the Postal Service operations, finances,
    and its services to the American people every day.
        One key issue we will discuss today is the Postal Service's
    proposed service changes which are currently under review by
    the Postal Regulatory Commission (PRC). We will continue to
    examine these plans and their potential impacts on constituents
    as well as their implications for Postal Service finances.
        The Postal Service connects Americans everywhere,
    delivering critical mail like prescription drugs, Social
    Security checks, rent payments, small business packages, and
    the list goes on. Americans rely on the Postal Service every
    day, so it's critical that we understand its plans for service,
    operations, and finances.
        Our last hearing with the Postmaster General was in April
    where we discussed the significant nationwide changes the
    Postal Service has begun making to its operational network.
    These include plans to consolidate facilities, and reduce truck
    trips, and other changes as to how mail is delivered. These
    changes will have raised concerns about service quality and
    cost effectiveness, particularly in rural areas like Iron
    Mountain Processing Center in my home State of Michigan.
        At our last hearing and afterward, my colleagues and I
    urged you, Postmaster General, to pause and further study these
    changes before moving forward to fully understand their impacts
    on the service and cost. As a result, the Postal Service paused
    a number of facility consolidations until January 2025. The
    Postal Service also requested an advisory opinion from its
    regulator, the Postal Regulatory Commission, to further study
    these changes. I think this is a positive step to fully
    understand the impacts through a transparent public process.
        However, since our last hearing, the Postal Service has
    also announced new changes, including changes to its service
    standards, which dictate the speed of mail delivery. Members of
    Congress, including Members of this Committee, have continued
    to raise questions about these changes and about the service
    impacts.
        Two years ago, I led the passage of the bipartisan Postal
    Service Reform Act, the first major reforms to the Postal
    Service in over 15 years. This legislation set the Agency on a
    more stable financial footing, providing over $50 billion in
    financial relief over 10 years. The Postal Service is not on
    the brink of financial crisis, but it does need to make careful
    decisions about how it moves forward.
        While the Postal Service is making intended changes
    intended to save cost, questions certainly remain about
    tracking actual cost reductions and the potential for service
    cuts that also impact the bottom line. Above all, the Postal
    Service must continue to focus on its public service mandate to
    deliver to each and every American. That's why we are here
    today to ensure the Postal Service remains accountable to
    Congress, and the American people, and the Members of this
    Committee. Other Senators I have heard from are certainly
    looking for a very open discussion.
        Mr. DeJoy, thank you. Thank you for being here today for
    answering members' questions, and I look forward to a robust
    discussion. I would now like to turn over the microphone to
    Ranking Member Paul for his opening remarks.

                   OPENING STATEMENT OF SENATOR PAUL

        Senator Paul. Over 40 years ago, Milton Friedman remarked,
    ``If you put the Federal Government in charge of the Sahara
    Desert, in five years, there would be a shortage of sand.''
    While Friedman was discussing price controls and output
    restrictions in oil and gas in Dubai, the same logic can be
    applied to the U.S. Postal Service.
        In 2020, Congress was promised that $107 billion bailout
    would put the Post Office out of the roam and out of the hole
    it has been within three or four years. We were also told that
    the USPS operations would break even by 2031. Postmaster DeJoy
    sat in front of our Committee in August of that year and
    stated, ``I am absolutely convinced that with some help from
    Congress and our regulator, we can do it, and that there is a
    bright future ahead for the Post Office.''
        I argued against giving more taxpayer money to the Postal
    Service, suggesting that private business would be better at
    managing ongoing costs by making the necessary cuts.
    Unfortunately, my concerns have proven to be correct. The
    Postal Service's Delivering for America (DFA) initiative, the
    bailout, was expected to yield quick results. However, the post
    office lost $6.5 billion in 2023, and is set to lose $9.5
    billion in 2024.
        That does not sound like progress. They were losing $1
    billion a quarter, now they are losing $2 billion a quarter.
    Only in Washington can someone point to losing $2 billion a
    quarter as a success. Given the continued financial shortfalls,
    it is entirely nonsensical for the USPS to convert more than
    190,000 service workers into career roles since October, 2020.
        If this were a private business, you would be doing the
    opposite. If you were a unionized corporation in one State,
    what did they do? They actually moved to another State and
    opened a non-unionized in a right-to-work State, and that's how
    they continue to exist. Corporations do not add to their misery
    by adding and increasing their labor costs.
        These government career roles effectively allow those
    workers to make 50 percent more per hour and create decades of
    benefits, responsibilities that will make breaking even in the
    future even more difficult. When we had pension problems in
    Kentucky, we did the opposite. We ended up changing from a
    pension. We went to a contribution plan, and then we gradually
    are fixing. It's still taking a long time because we had the
    old obligations, but we gradually figured out how to go to a
    new plan where we would not be stuck with all these pensions.
        These positions are of insourcing jobs that were provided
    at lower cost before by private partners who are increasing the
    cost of the Post Office. During the Postal Service Reform Act,
    I argued that no funding should be given to USPS without
    changes to its labor practices and cost. Instead, no labor
    changes were made, and now Americans are left holding the bag
    of an ever more bloated Postal Service.
        The Postal Service tried to explain away these bad numbers
    due to the cost that USPS cannot control. But the service is
    spending $9.6 billion on electric delivery vehicles, and
    spending nearly $40 billion over 10 years to convert and build
    certain facilities into hubs that so far have resulted in worse
    delivery and services.
        In order to keep making these infrastructure updates, the
    Postal Service asked to raise its $15 billion borrowing limit
    with the Treasury Department. Hardly sounds like a success.
    Private sector companies deal with uncontrolled costs all the
    time, including the same factors USPS faces like inflation, and
    they find a way to provide for their owners and shareholders.
    But they don't do it by adding more union employment.
        USPS would count for the uncontrollable costs in their
    budget and stop coming to Congress. You guys should try to fix
    the problem instead of keep coming back and asking for more.
    This has not stopped Congress, though, from throwing even more
    money at the Postal Service. For those counting, that's $120
    billion in funding and relief in the past four years alone.
        While $120 billion is already an astounding number on its
    own, when you consider the sum relative to our nation's dismal
    fiscal condition, it suddenly becomes reckless. We are over $36
    trillion in debt. It's time to do something different. What we
    are not seeing is anything different at the Post Office, and I,
    for one, say it's about time we have some reform.
        Chairman Peters. Thank you, Ranking Member Paul. It it's
    the practice of the Homeland Security and Governmental Affairs
    Committee to swear in witnesses. Mr. DeJoy, if you would please
    stand and raise your right hand. Do you swear that the
    testimony you will give before this Committee will be the
    truth, the whole truth, and nothing but the truth, so help you,
    God?
        Mr. DeJoy. I do.
        Chairman Peters. Thank you. You may be seated, and you are
    recognized for your opening remarks.

       TESTIMONY OF LOUIS DEJOY,\1\ POSTMASTER GENERAL AND CHIEF
            EXECUTIVE OFFICER, UNITED STATES POSTAL SERVICE

        Mr. DeJoy. Good morning, Chair Peters, Ranking Member Paul,
    and Members of the Committee. I appreciate the opportunity to
    once again discuss the significant progress that the U.S.
    Postal Service is making in accomplishing the objectives
    identified in Delivering for America plan.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. DeJoy appears in the Appendix on
    page 35.
    ---------------------------------------------------------------------------
        When I agreed to take the role as Postmaster General, the
    Nation was at the beginning of a pandemic, and the Postal
    Service was an organization in crisis facing a diverse array of
    challenges that put the organization on a near-term trajectory
    to financial and service collapse.
        The Postal Service had lost almost $90 billion, was
    projected to lose another $200 billion over the next 10 years,
    and was about to run out of cash before year end. Our over
    31,000 facilities were in shocking, horrible condition, with
    over $20 billion in deferred maintenance and ill-equipped for
    modern day tasks.
        We had not met our service standards in almost 10 years,
    and not reduced work hours in over eight years, despite
    significantly reduced volume. We had billions of dollars of
    self-inflicted wounds from poorly evolved package products, and
    had an organization and operational strategy that had long ago
    become dysfunctional.
        More explicitly, over 57 percent of our 31,000 post offices
    did not cover the cost of the people that worked at them, and
    76 percent of our 235,817 delivery routes lost money. We ran
    55,000 trucks a day, 70 percent empty, and had four different
    networks operating at significantly low-use utilization,
    wasting billions of dollars.
        This all came to a head in the peak season of 2021 when we
    were overwhelmed and dramatically impacted service throughout
    the Nation for many months. This was the dreadful condition and
    trajectory of the Postal Service prior to the DFA, and there
    was no plan anywhere to do anything about it.
        The DFA plan has five simple directional objectives to be
    accomplished in consideration with the laws and regulations
    that govern the Postal Service today, and the relevant
    attributes of our evolving economy, environment, geography,
    marketplace, and competitive landscape.
        These objectives are; to improve our operational precision
    and organizational effectiveness, to reduce our cost of
    performance, to create reliable and affordable service, to grow
    our revenue and margin on our products, to create productive
    and long-term careers for our employees.
        These initiatives and the commitment to this transformation
    has been embraced by our whole organization, and the pace of
    change and accomplishments are impressive. We are a different
    organization today, and I am impressed by the talent tenacity
    of our people as they work hard to make the Postal Service the
    best in commerce and public service for many years to come. A
    unique opportunity we have, and as the Congress intended when
    they created us.
        However, times have changed, and so has what it takes to be
    that entity that Congress intended. While we have accomplished
    a great deal, we are at the beginning of an ongoing journey to
    evolve with the Nation rather than lag behind. In the past, the
    inability and unwillingness to make the necessary changes when
    required is what had caused the condition and trajectory of the
    organization when I arrived here. To understand the full
    picture that the advisory opinion, contemplates, and solves, I
    refer to you to my written testimony.
        However, in summary, we have prepared a comprehensive
    proposal and have been responsive to hundreds of questions
    asked of us by the PRC and other parties. Let me share some key
    points as a foundation to help set aside the fears and
    misunderstandings that seem to surround the PRC advisory
    opinion.
        The changes we propose are to the collection, not the
    delivery of mail. In fact, we expect delivery times for most
    mail to improve. Your constituents receive far more delivered
    mail than they send. To further isolate the impact of our
    proposed change, it is primarily single-piece First-Class Mail
    to which we propose to modify the collection schedule and only
    by a matter of hours.
        In the last 25 years, the volume of first-class single-
    piece mail has plummeted from 57 billion pieces to 12 billion.
    Yet, the chaotic, costly, and illogical network we have been
    laboring under was originally designed for mail, and now
    redesigned to include the increased package volume over an
    integrated network. The survival of mail and the Postal Service
    itself depends on successfully navigating the irreversible
    volume shift.
        Although the proposal analyzes volume and distance to
    proposed schedule changes in the collection of single-piece
    mail, it's not a proposal that primarily impacts rural
    communities. The savings and operational efficiencies achieved
    here are substantial, and I assure you are necessary to
    preserve the universal service obligation (USO). The very
    mandate that policymakers fear being called into question is
    what we are in fact saving.
        Please note that any service adjustments fall within the
    existing two-and five-day service standards, and that the
    proposal introduces standards that are relatable to our
    customers, and that they will be based on the five-digit ZIP
    Codes we are familiar with.
        The changes proposed create from a network of massive chaos
    and redundancy, and integrated mail-in package network as
    required by the recent postal reform legislation, thereby
    correcting for poor operating practices, and enabling us to
    compete for new revenues and survive. In addition, the letter
    of invitation I received for this hearing requested that we
    also discuss transparency, and accountability, and
    responsibilities we shoulder. In my written testimony, I have
    detailed for you every transparency, regulatory, and
    accountability burden under which we labor.
        It is detailed in testimony and the weighty attachment that
    reminds the reader that we are not a typical government agency.
    We are self-financed and an independent establishment of the
    Executive Branch. We must operate, in many ways, like a private
    business, and we have many competitors.
        We also have many layers of regulation and oversight that
    would cripple a private company that also had our scope and our
    public policy mandates. This has significance as it has
    paralyzed the Postal Service of the past, and a contributing
    reason why we are in the predicament we are in.
        We relatedly a share testimony and attachment that details
    our unfunded mandates. As essential and justified as our
    universal service obligation is, it comes at a very high cost
    that needs to be reckoned with, at the same time as mail and
    package volume shift, delivery points steadily increase, cost
    climb, and pressures not to change a single thing about our
    service persist.
        I welcome the opportunity to educate the Committee on our
    plans to move the organization forward. I welcome you on that
    journey. Thank you.
        Chairman Peters. Thank you, General.
        In September, I asked for your commitment to report to this
    Committee on how the Postal Service has substantially and
    substantively considered the Postal Regulatory Commission's
    input on national changes that are going to be made to the
    network and to service standards.
        You committed, at that time, to provide comprehensive
    responses to any PRC recommendations. But I would like to
    follow up on that, if I may, sir. Will you provide this
    Committee with a copy of your comprehensive response to each of
    the PRCS recommendations when they come out? Yes, or no?
        Mr. DeJoy. Unless there's some regulatory reason not to, we
    will submit our responses to the Postal Regulatory
    Commission.\1\ I think I am happy to send you a copy of our
    responses,
    ---------------------------------------------------------------------------
        \1\ The responses from Mr. DeJoy appears in the Appendix on page
    135.
    ---------------------------------------------------------------------------
        Chairman Peters. So, you will provide that to us?
        Mr. DeJoy. Yes.
        Chairman Peters. I appreciate it. For each PRC
    recommendation, you will provide a detailed explanation as to
    whether USPS will implement the recommendations as well?
        Mr. DeJoy. We will answer the responses comprehensively. To
    the extent we----
        Chairman Peters. To the degree you will implement or not.
    Including to the degree to which you are going to implement or
    not implement going forward.
        Mr. DeJoy. There's a specific way that we go about
    answering questions in the way that our legal department deals
    with. But from the standpoint of the organization as a whole,
    whether we submit it in that or we announce publicly what we
    are going to do at the same time, there will be full disclosure
    and transparency as to what we are actually going to do.
        Chairman Peters. OK. Very good. The Postal Service is
    required to provide, ``Prompt, reliable, and efficient service
    to all communities,'' as you are well aware, and that includes
    rural areas. Rural Americans, like my constituents in the Upper
    Peninsula of Michigan, rely on the Postal Service to promptly
    deliver Social Security checks, rent payments, all sorts of
    critical mail. The Postal Service has announced service
    standard changes that would significantly impact rural mail.
        Based on the numbers the Postal Service filed with the PRC,
    your plan is to slow down 68 percent of single-piece, First-
    Class Mail in rural areas, and that compares to 34 percent in
    urban areas. You would slow down roughly 15 percent of rural
    mail and upgrade only about three percent of it. These are
    necessary deliveries for these communities, so it would come
    late.
        My question for you, sir, is how does the slowdown of rural
    mail, if implemented, comply with a Postal Service's obligation
    to provide prompt service to all communities?
        Mr. DeJoy. I am not familiar with those numbers that you
    cite. First off, delivery of mail to rural areas, and to all
    areas will not change. In a few cases, about 10 or 15 percent,
    will, in fact, improve. Delivery is not being affected. OK? We
    are talking about the collection process of single-piece,
    First-Class Mail only, right?
        Single-piece, First-Class Mail was 59 billion pieces 20
    years ago, 23 years ago, it's down to 12 billion pieces now. We
    run the same collection processes for single-piece, First-Class
    Mail that drives significant cost and take up a significant
    amount of time in moving the overwhelming amount of volume that
    moves through the system.
        On the delivery side, I am anticipating improvement in the
    delivery times because most mail originates within the 50-mile
    radius of the operations we are talking about. It's the
    collection of single-piece mail going out of these areas that
    could be slowed down somewhere between 12 and 24 hours.
        Chairman Peters. Also, service plans to reduce truck trips
    in areas across the country, collecting mail less often from
    outlying facilities and therefore reducing services. You tested
    this initiative in the Upper Peninsula of Michigan, and my
    constituents have now reported delays to important mail, like
    insurance claims, rent checks, the list goes on.
        There have also been delayed prescriptions, where extra
    days certainly matter, and cities that were sending some
    samples to the Environmental Protection Agency (EPA) as a
    result of water testing, it requires quick turnaround. They can
    no longer do that because they cannot rely on the Postal
    Service to get that mailed to them on time. The USPS has said
    that this transportation optimization was a pilot, but my
    question for you is, are you planning to make that permanent up
    in the UP?
        Mr. DeJoy. So that was an initiative called Local
    Transportation Optimization (LTO). We rolled that out in 12
    locations around the Nation. Whether service, that the
    incidents that you were speaking about, consequences were
    related to that change or not, I cannot comment on because
    there are other reasons why service fails or why expectations
    are not met in terms of the changing environment.
        There are a lot of places where we exceed in service. Part
    of the rationalization of the network is to meet the standard.
    But LTO, we went back and looked at it, and it was not
    consequential enough and executable enough to get the amount of
    cost savings that we needed. We have changed to the more
    regional approach that we are taking going forward. That's in
    our filing. The concept is the same, the area is just bigger
    that we are going to deal with.
        Chairman Peters. The Postal Service released its strategic
    plan in 2021. It called for postal reform, which was completed.
    It also called for executive actions to change how the Office
    of Personnel Management (OPM) calculates Postal Service pension
    obligations.
        I sent a letter to the White House pushing for this change.
    OPM simply uses outdated accounting rules for postal employees,
    as you know, compared to other employees, and that puts extra
    cost onto the Postal Service. This could be changed, and the
    belief is could save billions of dollars while also saving
    pensions.
        My question for you, sir, are you still in favor of making
    this administrative change? Could you explain to this Committee
    why that would be important?
        Mr. DeJoy. There's two areas of our pension that we that we
    are interested. One is the Civil Service Retirement System
    (CSRS) reallocation, when we were separated as an independent
    agency from the Federal Government. We have calculated a
    significant shifting of the Federal Government's burden for its
    retirees, at the time, onto our balance sheet.
        This is one of the things you helped us with trying to,
    writing to get actually executive action to make that change,
    which the Office of Legal Counsel (OLC) has said that that
    requires legislative change instead of executive change. But
    yes, we do feel the calculations show that we were overburdened
    when we separated from the government.
        There are other things within our retirement plan. I expect
    to have 620,000, 610,000 people next year in our organization,
    and I will have 710,000 people on my retirement plan. There are
    things within our investment structure that will kill us. This
    is enterprise services money that we have aggregated and put
    into the foundation. We have to invest it as, with the Federal
    Government. We do not get the returns like a Tennessee Valley
    Authority (TVA) or an Amtrak. That's one of the other things
    that we are looking to do.
        Then, there's some other subtle magic that OPM does with
    their calculations that are punitive to us, relative to the age
    group, the age calculations that they use for us and so forth.
    It is a huge issue. It was 80 percent of our loss this year. In
    my projections, to break even over the last three years, we had
    an additional $10 billion of bills from the Federal Government
    on our retirement plan that we were not expecting, and were
    well above the projections in the thing.
        It's no different than any major corporation that found
    themselves in these particular constraints when they had
    defined benefit plans. However, in some cases, they are able to
    raise their prices and so on and so forth, or do their
    investments. It concurs with the changing marketplace. We had
    nothing available to us. We could not raise our prices
    effectively for the changes in the economy, and we could not
    rationally put investments with regard to meet that obligation.
    It's an obligation that will continue to be detrimental to the
    survival of the organization.
        Chairman Peters. Thank you. Ranking Member Paul, you are
    recognized for your questions.
        Senator Paul. You mentioned in your testimony that the Post
    Office is different than other areas of government. That it has
    to operate like a private business. You also mentioned that
    about 80 percent of the volume of First-Class Mail has gone
    down over time.
        Can you think of a private business where 80 percent of
    what they are doing to make money is going down in volume that
    would actually increase their employees?
        Mr. DeJoy. Yes. Senator, you keep asking--I did not make
    the laws that organized the United States Postal Service. OK? I
    came in, as I said, to the condition that we had, and I am
    trying to fix it. Now, you exaggerate the hiring aspects. I am
    20,000 people less in employment today than when I walked in
    the door. OK? I burned 50 million less work hours over last
    year than we did the year I walked in the door.
        Senator Paul. Is there more or less work being done by
    contractors versus government employees?
        Mr. DeJoy. That's a good point. I was a contractor in that
    industry, and again, I walked into the situation I had. The
    contractors the contracts that we had and the locations that we
    had were detrimental to the organization. I had two points to
    get cost out. Do I shut down all my operations where all my
    people are, or do I bring in these contracting operations? I
    have changed huge contracts across from our priority mail
    system.
        Senator Paul. But I know of no one in private practice or
    investors who give advice through a corporate board who would
    say, you have a declining business model, we are going to
    increase the numbers. But then when you have a choice of hiring
    contractors that won't be paid the same wages, or pension
    benefits, or healthcare benefits that you pay your employees,
    you are up 190,000. You have insourced 190,000 jobs.
        It's just sort of inexplicable. The whole point, that of
    the reform, of shifting the cost. It's not really reform, it's
    a shell game. We just took a bunch of things that are still
    costs on your books, and we put them on somebody else's books
    somewhere else in government. It's still a massive cluster in a
    way that the debt problem is just shifted over to another
    account. But in doing that, the main thing you were trying to
    get away from was healthcare costs and pension, right?
        If you compare a contractor or a contracted employee to a
    government employee, an insourced employee, and you compare the
    health costs and the pension costs, they are dramatically
    higher for insource. By increasing your number of people who
    work for the government as opposed to contractors, you are
    compounding the same problem.
        You were here with us three years ago saying, we cannot
    handle all these other expenses. We need to shift them
    somewhere else. The reform package did that. But in contrast,
    then you continue to hire more people instead of saying, well,
    we have all these extra costs associated with government labor,
    why don't we hire labor outside of the government and use
    contractors?
        Mr. DeJoy. Senator, in isolation on one element of the
    issue, which you seem to be focused on, perhaps you are right.
    OK? But I have come out of industry. I have been on boards. I
    have built an organization in this similar space with 20,000
    people, worked in an organization with 100,000 people, and
    walked into a situation that had varying activities going on
    inefficiently across its operation.
        Senator Paul. But I would argue you would have treated your
    own business differently.
        Mr. DeJoy. I have not converted 140,000 people to full-
    time.
        Senator Paul. Your business was successful, though, not by
    doing the decisions you are making now. This would not have
    helped a private business as it is helping the Post Office.
        Mr. DeJoy. I have to make decisions within the environment
    that I have. If I move a change of collection box time on a
    blue box, I have the rage of Congress bearing down on me. OK?
    There are tradeoffs that one has to make in this step. At the
    end of the day, we have requirements to have about 20 percent
    of our workforce be pre-career, 80 percent of our workforce
    be----
        Senator Paul. You are delivering less mail. You need a
    smaller organization on a building.
        Mr. DeJoy. We are actually growing in the package business.
    The objective here is to create an integrated mail and package
    network. An integrated mail and package network means less
    contracted places, less of our own places, and putting people--
    --
        Senator Paul. It's hard to point toward success when the
    debt last year was $6.5 billion, and this year's $9.5 billion.
    That doesn't look like success under any sort of metric. That
    looks like it's getting worse.
        The reason why labor's an important part of this is, it's
    estimated that the labor's 80 percent of the cost of doing
    business for the Post Office. For United Parcel Service (UPS),
    which is unionized, but a private union versus a government
    union, it's about 50 percent. For Federal Express (FedEx),
    who's non-unionized, the cost of labor to the business is about
    38 percent. There are cost savings by being outside of
    government unions. Frankly, even private unions have some cost
    savings.
        But when we have a hole and we see a problem, we try to
    change it. Like, we have a pension problem in Kentucky. We just
    simply said the new hires would not be in the pension system or
    get a different deal. We understood that the previous hires
    would have to get their pension. The new people would come
    under a new contract, and we will dig our way out of the hole.
    It's going to take us 20, 25 years to dig our way out of it,
    but we began doing it by actually offering defined contribution
    as opposed to defined benefit.
        You sort of did this and shifted the cost. But now, we are
    getting more people, we are getting more government workers.
    That's where the problem originated; was too many benefits to
    government workers.
        Mr. DeJoy. I do not know that I agree, again, with that
    premise that that's where the problem originally----
        Senator Paul. Is labor still about 80 percent of your cost?
    Is labor still 80 percent of the cost?
        Mr. DeJoy. It's still 80 percent of our cost. We have a
    plan to try and make the labor cost that we have work. And that
    means to create an integrated operation. We have 500 different
    locations around the organization that we were processing mail,
    including our contractors. I am trying to get down to 200.
        Senator Paul. Do you have the ability to hire new people
    under either a different pension or a different healthcare
    system? Do you have the ability to hire new workers for the
    government under a different pension or different healthcare
    arrangements than the previous? The union commands what the
    structure is, and you have to stay the same, right?
        Mr. DeJoy. The Senate, and the House, and administrations
    when forming the United States Postal Service made these rules
    that we had.
        Senator Paul. You are exactly right. Then when we looked at
    the reform, that was my suggestion. Is if labor is 80 percent
    of your cost, you have to do something about your labor costs.
    Either outsource it, or what you need to do is provide a
    different alternative through pension or through healthcare.
    But we did not do any of that. All we did was the shell game of
    taking all your costs and sticking it somewhere else.
        Mr. DeJoy. I disagree. How about we stopped processing 20
    million packages a day by hand. Right? How about we bought some
    conveyors. OK?
        Senator Paul. How about you show us some cost savings?
        Mr. DeJoy. We saved $2.5 billion dollars in costs, and $1.4
    billion----
        Senator Paul. The debt went from $6.5 billion to $9.5
    billion.
        Mr. DeJoy. That's right. We had 20 percent inflation, and I
    had fixed prices.
        Senator Paul. So did everybody else. But not everybody else
    in the private marketplace treating their business like a
    private entity lost an extra $3 billion. It just isn't a
    success story. It's not your fault----
        Mr. DeJoy. What would you like me to do?
        Senator Paul. I am not blaming it all on you, but you are
    constrained by things. But to say it's not a problem, I think,
    is just not to be honest with yourself----
        Mr. DeJoy. I have never said it's not a problem.
        Senator Paul [continuing]. And with everybody else. It's a
    huge a problem.
        Mr. DeJoy. I have never said it's not a problem. I am
    trying to find a fix and direction.
        Senator Paul. It's a huge problem. It's the way government
    works, and government just doesn't work very well. We should
    try to minimize government. One way to minimize government is
    not to hire more government workers. Make government smaller,
    hire private workers, because private workers are more subject
    to the marketplace. You would say to a private worker, we
    cannot keep offering the same pension we have done for 40
    years. We cannot offer the same healthcare that we have done
    for the last 40 years. I do not think we are doing enough. I
    think we are going in the wrong direction.
        Mr. DeJoy. My goal is to get the Postal Service workers to
    operate productively and efficiently. That's by giving them the
    tools, and the facilities, and the processes, and the
    inspiration to move forward. And from the standpoint of service
    and of cost effectiveness of the labored dollar, I think there
    is much improvement that we have made and much improvement that
    we can get to.
        There are other burdens around the organization that I
    agree with you. A tough hill to climb. But the operational
    aspects and the growth aspects of the organization, the
    competitive aspects that it could have deployed 20 years ago
    are what we are trying to do now.
        While you are all messing around with what the legislation
    should be, I am trying to deliver mailing packages cost
    effectively in the best way possible, like a private industry
    would, like a UPS would. That's what I have expertise in, and
    that is what my target is operationally and growthwise. Is that
    the Postal Service should act like UPS and FedEx with regard to
    all these other things that you all share responsibility in.
        I am happy to work with you, like I worked with you,
    Senator Peters on getting the Postal Reform Act passed. I am
    happy to do that. Let's do it. But right now, I know what I am
    doing with regard to consolidating the organization, trying to
    move the organization forward to get work hours out, which we
    have, to get transportation cost out, which we have, right, and
    to grow the business, which we have. We will continue down that
    path until somebody hauls me out of here.
        Chairman Peters. Senator Carper, you are recognized for
    your questions.

                  OPENING STATEMENT OF SENATOR CARPER

        Senator Carper. Thanks very much. And welcome, Mr. DeJoy.
    Good to see you. Thank you for your being here. There are
    several people in the audience behind you that we have worked
    with in the past. It's nice to see them.
        One of the quotes, I don't know who's quotes this is, but
    where lies adversity, lies opportunity. That's one of my
    guiding principles in life. In the adversity that's faced by
    the Postal Service, there are opportunities as well. I think
    you are trying to seize today on some of those.
        There are others, I will say, competitors to the Postal
    Service who are in the package business. They do not deliver
    mail, but they deliver a lot of packages. I know you guys are
    delivering a lot more packages as well. But some of those
    companies have decided over the last 5, 10 years that they want
    to phaseout their diesel engines and their gasoline engines,
    and have mail delivered in vehicles that do not create, carbon,
    greenhouse gases.
        They did not make that conversion. Those companies did not
    make the conversion because they are somehow concerned about
    the planet burning up. Because of environmental concerns, they
    did it because they felt that they could actually--there's an
    economic argument. They thought that they could do this to
    deliver their products in a more cost-effective way.
        I think when we passed a big postal bill a year or two ago,
    a couple years ago, we tried to provide some money for the
    Postal Service as your vehicles were very old. As you are
    making the transformation and the modernizing of your fleet to
    make sure you are buying some vehicles that could be hybrids,
    it could be electric vehicles to save money. Not just because
    it was the right--you are being good environmental stewards.
        Could you give us an update, please, on the rollout of
    postal vehicles, hybrids, electric vehicles, and some of the
    challenges you've encountered? How is the Postal Service
    finding this transition, both on the economic side and on the
    environmental side?
        Mr. DeJoy. Yes. Thank you, Senator. As you said, we have
    over 220,000 vehicles that are over 30 years old, long exceeded
    their useful life. They were burning up on the street when I
    got here. We have committed both to internal combustion engine
    (ICE) vehicles and electric vehicles, 106,000 vehicles, that we
    will be bringing into the system over the next four years, of
    which 66,000 of them will be will be electric vehicles.
        So far, to date, we have acquired--coming in this year, we
    will have about 10,000 electric vehicles coming. Now, there's
    two sides of that. There's the vehicle itself. We have unique
    requirements because most of our vehicles have to be right-hand
    drive as opposed to left. We can't go commercial off the shelf
    for many. We bought 10,000, for the transits, that are coming
    in. We next year we will start receiving a high volume of our
    next generation delivery vehicle, which is the right-hand side
    vehicle. Most of those will be electric vehicles over the rest
    of the years.
        There's two sides to that. We have to build out the
    electric vehicle infrastructure, which is a big and long,
    multi-year project. There's imbalances right now in terms of
    getting the, commercial off-the-shelf vehicles that are
    specifically left-hand drive into the system. But we should be
    through that within the next 8 to 12 months to have those
    deployed. But we are moving forward in pretty good pace.
        We got the President's Sustainability Award for rollout of
    electric vehicles. Originally, we looked at a one-for-one
    charging station per vehicle relationship. We are looking to
    expand that. We are finding some of our route's consuming can
    go two or three days without being recharged. We are putting
    that into the model, and that's going to help accelerate the
    deployment.
        We are looking at clustering around some of our larger
    delivery units where we have 200 and 300 charging stations for
    vehicles there doing alternate days where we have the ability
    to do that. The team knew absolutely nothing about--including
    myself--about electric vehicles when we got here where I think
    we are pretty formidable and we will rise on that.
        The other thing, I do think that in my work here, and in
    the other environmental things that we have gone through, I do
    think the statistics back 20 percent of the people order how
    their packages get delivered based on the environment. We
    expect that to grow, and we want to be the preferred supplier
    in the package delivery business for a certain size package for
    a certain distance. We are paying attention to that in our
    marketing in terms of all other points.
        Senator Carper. Good, good for you. Yes, I did. I am going
    to have to cut you off just for just a moment here. Vote by
    mail----
        Mr. DeJoy. Just one other thing.
        Senator Carper. No. I am running out of time. I am sorry.
    Thank you for your responses, and thank you for your commitment
    to actually doing the right thing, but also the economically
    smart thing.
        The other question I want to quickly ask, we have just come
    out of an election season, as we know, and people all over the
    country have been voting for Federal, State, local candidates.
    As it turns out, a lot of people are voting by mail, and they
    are finding that they like it. In fact, the majority, I think,
    a clear majority of people do not vote in person anymore. What
    kind of opportunities has this provided for the Postal Service
    house, and have we seized today to take advantage of that?
        Mr. DeJoy. I did not hear the last part. Have we done what?
        Senator Carper. How has the Postal Service seized today?
    What the voters are looking for are easy ways they want to
    vote, but they do not want to go stand in line and the Postal
    Service can help with that. How are we doing in that regard?
        Mr. DeJoy. First of all, we have just put out our report
    with 99.8 percent of the ballots getting, you know, within
    seven days, so on and so forth. It was less than in 2020.
    Voting was less than in 2020. I would say that there are
    opportunities to make this better, right? We have to get to a
    point where two things can be correct. We deliver 99 percent of
    the ballots on time, and you still find 1,000 ballots in place
    that didn't make it.
        That's a big issue. It's not necessarily because of the
    Postal Service. It could be, but there's 8,000 different voting
    districts across the Nation, across 50 States with different
    rules and different types of mail pieces and different
    requirements. We do not count, we do not say when the vote has
    to be in, if it gets counted, and all that. That creates a lot
    of ugly conversation between our organization and State
    secretaries of State and so forth. Simple accusations of
    something being laid on the mail process creates a lot of
    emotion.
        I think, long-term, we did an excellent job. It was a big
    effort on this. I think a standard mail piece would be helpful
    to us long-term. We are looking at ways to work with the
    different States, the different election officers to get into a
    specific contract-type of basis to do that.
        But, yes, vote by mail is here to stay. We have done a good
    job. The election officials have done a good job, but it's
    still not where it needs to be because if we want 100 percent
    guaranteed performance, we need to do more together.
        Senator Carper. Thanks very much.
        The Chairman. Thank you. Senator Hassan, you are recognized
    for your questions.

                  OPENING STATEMENT OF SENATOR HASSAN

        Senator Hassan. Thank you very much, Mr. Chair, and I want
    to thank you and the Ranking Member for holding this hearing.
    Welcome, Postmaster General. It is good to see you.
        I want to focus a bit on the ways that you can work to
    strengthen mail service, and I want to also share my concerns
    about some of the proposals that you have that would make mail
    service worse in my State, for Granite Staters. The Postal
    Service has a plan to move some postal operations from
    Manchester, New Hampshire to Boston. I oppose the plan because
    implementation of it will harm service and delay delivery. I
    also oppose moving operations from White River Junction,
    Vermont to Hartford, Connecticut, because White River Junction
    serves Granite Staters in the Northern part of New Hampshire.
        We know from Postal Service Inspector General (IG) reports
    that processing center consolidations like the ones you are
    considering here, including those in Virginia and Georgia,
    resulted in ``an immediate and significant decline in service
    performance''. And we know, too, that those declines continued
    for several months, and that these facilities are still
    struggling to meet their on-time delivery goals.
        I have also repeatedly heard serious concerns from postal
    employees and customers that your plans would slow delivery
    service in New Hampshire. Just to be clear, taking a collection
    center, a processing center from Manchester to Boston, moves it
    at least a two-hour drive time both from the collection point
    into the processing center, and then back up to New Hampshire.
        Despite pausing your Manchester and White River Junction
    consolidation plans earlier this year, you have not sought an
    independent analysis of how these plans will impact Granite
    Staters. So, yes or no, will you ask the Postal Regulatory
    Commission to analyze the service impacts of moving operations
    from Manchester to Boston and White River Junction to Hartford?
    If the Postal Regulatory Commission finds that moving
    operations from Manchester to Boston, or White River Junction
    to Hartford will cause significant disruptions, will you stop
    the plan from moving forward?
        Mr. DeJoy. If you are asking me if I would specifically ask
    the Postal Regulatory Commission to opine on that specific----
        Senator Hassan. To have an in an independent analysis done.
        Mr. DeJoy. I would not.
        Senator Hassan. So, you won't have that done?
        Mr. DeJoy. No.
        Senator Hassan. I am going to continue to strongly oppose
    the plans, especially in the absence of an independent review
    of the service impacts in New Hampshire, because common sense,
    and my own familiarity with the whole region tells me that this
    will slow down service in considerable ways.
        How are you going to continuously monitor service as
    operations transition from Manchester to Boston, or from White
    River Junction to Hartford? If and when delays occur, how are
    you going to rectify them?
        Mr. DeJoy. That's a good question. That is something that
    we have amped up considerably in terms of operational reviews,
    performance excellence onsite, and so forth. I can tell you
    that we have people looking at every bit of performance in all
    of these moves now, and we have response teams ready to jump in
    and make the necessary corrections.
        Senator Hassan. What if your monitoring tells you that it
    was a mistake to take it from Manchester to Boston, because
    it's going to delay delivery in considerable ways.
        Mr. DeJoy. Again, a mistake, you may think it's a mistake,
    and we may not think it's a mistake. A delay, a change in
    service, and I don't know the specifics right now, off the top
    of my head, in Manchester. We will have a service standard that
    is good for the whole nation, and we will meet that service
    standard.
        Senator Hassan. Because my time is limited, I hear you on
    that, and I hope you are right, but I believe you are not. The
    reason is, if you slow down collection, if you do collection
    less frequently, and it takes longer to drive mail from one
    place to the processing center than it did before, and you are
    doing less collection, and it's going to take longer to get it
    back to the State where you need to deliver, my common sense
    tells me that is going to delay service. Let me move on to
    another issue.
        Mr. DeJoy. I think you are double counting some of that
    time.
        Senator Hassan. Since I am really familiar with the drives,
    and I am pretty familiar with the terrain. I am listening to my
    postal employees a lot because they are really smart people and
    they are familiar with it too. I would suggest you might want
    to talk with them.
        Mr. DeJoy. I do. I talk with my employees all the time.
        Senator Hassan. But let me move on. Mr. DeJoy, we have
    limited time, and so I am going to move on to my next question.
    While you have focused on making large-scale operational
    changes, some smaller changes and investment in technology can
    have significant and positive impacts, because they will
    improve employee safety, they will boost morale, and they will
    improve customer service. There are two incidents that I want
    to highlight that demonstrate the need for common-sense
    investments by the service in technology.
        First, earlier this year, a Nashua, New Hampshire letter
    carrier was robbed at gunpoint while delivering mail.
    Thankfully, he was unharmed, but the robbers stole his arrow
    keys, which are used to access mail collection boxes. Then they
    use the keys to steal the mail. In response to the rise in
    attacks on postal employees, letter carriers have called for
    converting arrow keys to electronic fobs, which could be
    disabled in the event that the fobs are stolen, preventing
    further crimes and disincentivizing criminals from stealing
    them in the first place. That's one incident.
        The second incident occurred in Hanover, New Hampshire,
    where the local post office did not have access to Wi-Fi for
    two months earlier this year, meaning that the post office was
    unable to process credit cards to perform basic transactions.
    As we all know, having reliable Internet access is essential
    for operating a business in this day and age. So, will you
    commit to making common-sense investments to improve employee
    safety and customer service as part of the Delivering for
    America plan?
        Mr. DeJoy. The Delivering for America Plan is all about
    making investments in our facilities and modernizing the
    network. So, yes.
        Senator Hassan. Thank you. These are things that letter
    carriers and other employees have raised, and we have had to
    push really hard, for instance, on the Wi-Fi issue. I would
    look forward to working with you on that.
        I only have a little bit of time left, but I do want to
    just raise one more issue. My office regularly receives
    outreach from constituents asking for our help in resolving the
    postal issues they are facing. For example, for more than seven
    years, a small business owner in Peterborough, New Hampshire
    was able to reliably schedule package pickups from her home
    nearly every day. Whether it was one package or 30, whether it
    was rainy or sunny.
        After her regular mail carrier retired in 2023, the daily
    pickups became less reliable, and some days they were missed
    altogether. We hear stories like this all the time; frustrated
    customers and small business owners who are looking for
    reliable, consistent service. When we reach out to our Postal
    Service customer liaisons or regional management seeking help,
    we are often met with excuses instead of action. That's,
    obviously, not acceptable.
        Will you commit to ensuring that your regional management
    takes a more active role in working with us to resolve issues
    brought to us by our constituents?
        Mr. DeJoy. Yes. I think we do need some work in that area,
    Senator. We are aggressively pursuing that.
        Senator Hassan. I appreciate that. I will also just add
    that a number of my colleagues on both sides of the aisle have
    felt that sometimes your office's response is lacking when we
    make inquiries. I hope very much that we can work on improving
    that as well. Thank you.
        Mr. DeJoy. Sure.
        Chairman Peters. Senator Blumenthal, you are recognized for
    your questions.

                OPENING STATEMENT OF SENATOR BLUMENTHAL

        Senator Blumenthal. Thanks, Mr. Chair. Thanks for having
    this hearing. Thank you, Mr. DeJoy, for being here today.
        When you were last here in April, you and I talked a little
    bit about Ridgefield, Connecticut. Small town, but important to
    me and the people of Connecticut, along with other towns where
    United States Postal Service has property that is essentially
    unused, and where in fact, the Postal Service could save some
    money. Maybe not billions of dollars, but every penny saved, as
    you know, from your business experience, is important to a
    corporation.
        When we spoke in April, you promised to look into the
    Ridgefield property, personally, but all you did afterward was
    cite a September, 2023, letter from one of your government
    relations people, Scott Slusher. Is he still with you?
        Mr. DeJoy. Yes.
        Senator Blumenthal. Is he here today?
        Mr. DeJoy. Right there. Yes.
        Senator Blumenthal. Good morning, Mr. Slusher. Mr. Slusher
    told me in that letter, ``During our peak holiday season, when
    mail and package volumes dramatically increase, the lot will be
    needed to accommodate the foreseeable needs of our customers
    and the additional seasonal employees we employ to meet those
    needs.'' When was the last time Mr. DeJoy you visited
    Ridgefield, Connecticut?
        Mr. DeJoy. I do not know that I have ever been to
    Ridgefield, Connecticut.
        Senator Blumenthal. You have never been there?
        Mr. DeJoy. No.
        Senator Blumenthal. Has Mr. Slusher ever visited? I take it
    from your non-answer that he has not.
        Mr. DeJoy. I don't keep up with the travel.
        Senator Blumenthal. You don't know. No?
        Mr. DeJoy. No.
        Senator Blumenthal. Let me show you a photo\1\ of that lot
    last December, December 27th during the peak holiday season.
    It's empty. It's empty every day in December. It's empty every
    day during the year. That lot is unused. The small businesses
    on Main Street want to make that lot available for parking.
    ---------------------------------------------------------------------------
        \1\ The photo referenced by Senator Blumenthal appears in the
    Appendix on page 121.
    ---------------------------------------------------------------------------
        They don't want to take anything away from the United
    States Postal Service. The non-responsiveness, I am tempted to
    say stonewalling of the Postal Service in response to their and
    my request, the town of Ridgefield, so that that property can
    be used for parking, enabling more customers for those small
    businesses on Main Street, I think is really unacceptable. Will
    you come to Ridgefield?
        Mr. DeJoy. Sure.
        Senator Blumenthal. We will set it up with your office
    during the peak holiday season.
        Mr. DeJoy. I make trips.
        Senator Blumenthal. You will love Ridgefield.
        Mr. DeJoy. People invite me. I will come to Ridgefield.
        Senator Blumenthal. It's especially beautiful in the peak
    holiday season. While you are in Ridgefield, maybe we could
    also visit Milford, Norwalk, East Hartford, where there are
    properties that could be sold by the Postal Service. They are
    essentially unused. Postal Service could make some money. And
    right now, it is essentially refusing even to respond as you
    have done, essentially, on Ridgefield.
        Mr. DeJoy. First of all, I will take the whole tour. I will
    come up. But we have these requests throughout the whole
    nation, and we are in the process of looking at 31,000
    facilities across the Nation, trying to determine what we are
    going to stay in and not stay in where we are going to park
    electric vehicles, and so forth.
        We are in a status of evaluation. We will get through this
    as we work through our whole network, where our sorting and
    delivery centers are going to be, what our retail
    configuration's going to look like, and so forth. Then, that
    will be the time for us to move out in terms of looking at the
    monetization----
        Senator Blumenthal. But the problem is, Mr. DeJoy--and I
    apologize for interrupting, but my time is limited--as you well
    know, that in Norwalk, they are in the process of redeveloping
    their downtowns now in real time. But some of that in Milford,
    they are redeveloping a downtown. They want to provide you with
    reasonable alternatives for the postal property if it ever is
    going to be used.
        In Litchfield--I mean, I could go through a number of towns
    where in real time, right now, there are businesses and
    taxpayer interests, and your customers are at stake. Why can't
    we move on some of these properties right away, rather than the
    post office, in effect, with all due respect, stonewalling the
    people of Connecticut.
        Mr. DeJoy. I do believe that we need to, and have started a
    process, to engage. I just was with a couple of congressmen in
    their towns looking at some of these projects. I do think we
    need to get into a better dialog, more meaningful dialog with
    local constituents quicker in terms of the decisions that we
    need to make and the reasons why we can't relinquish or can
    relinquish the property. I think we need to get better at.
        That does not change the answer in many cases because we do
    need many of these properties. But so, I don't know. Do you
    want me to look into this further?
        Senator Blumenthal. Well, you promised to look into it in
    April.
        Mr. DeJoy. We gave you an answer.
        Senator Blumenthal. You gave me an answer to refer to a
    September, 2023, letter, which frankly, I find insulting.
        Mr. DeJoy. What do you find insulting?
        Senator Blumenthal. Because, what you say is absolutely
    untrue. That it is used in the peak holiday season. If anybody
    paid attention, gave it the slightest care.
        Mr. DeJoy. That's not true. Because, Senator, back when I
    got here, we added like 1,000 locations during peak, right, to
    do deliveries. Because of some of the changes that we have made
    in our operational processes that is coming down. We ran a lot
    of additional operations during the peak season that were
    crazy, and costly, and deteriorated service. In our process, I
    am emptying buildings all over the country, but this is a
    process.
        Senator Blumenthal. The process seems to be never-ending,
    and----
        Mr. DeJoy. Exactly.
        Senator Blumenthal [continuing]. The lack of an end means
    the United States Postal Service is deprived of revenue that it
    needs, and it means insulting the people of the United States
    who have an interest, your customers, not only in that revenue,
    but also in the most effective use of property that belongs to
    the United States Postal Service. I welcome your willingness to
    come visit----
        Mr. DeJoy. I will come. If I give up a building--I get
    booted out of a retail center where I am paying, let's say,
    $300,000 a year, you know what the price of that is for me to
    go someplace else today? Like $3 million a year. I have to be
    careful with what we do with this real estate. There's
    significant increases in value. Also, a whole cartel of
    opportunists that we have dealt with over the years at the
    Postal Service was regard to the centers. So, that property in
    a downtown, if you want a post office or a postal service, we
    are going through making----
        Senator Blumenthal. Are you aware that the post office
    moved out of Ridgefield? The office is no longer there. I would
    suggest that you really look into, as you promised you would
    do, the situation there personally. Maybe ask Mr. Slusher to do
    an advance visit so that you can be prepared when you come with
    me. I appreciate your willingness to do so, but time is not on
    our side when it comes to those small businesses, whether it's
    in Ridgefield or the interests of towns, Milford, Norwalk,
    Litchfield, East Hartford, where the property interests are not
    used properly.
        I apologize for going over my time, Mr. Chair.
        Chairman Peters. Senator Rosen, you are recognized for your
    questions.

                   OPENING STATEMENT OF SENATOR ROSEN

        Senator Rosen. Thank you, Mr. Chair, and thank you for
    holding this hearing.
        I do want to say, and I am very concerned, Postmaster,
    about your dismissal or lack of consideration of doing specific
    analysis and areas of concern regarding our mail delivery and
    our postal assets. I might remind you, as I follow the
    distinguished Senator from Connecticut, that today, that this
    body has oversight responsibility. We do expect timely
    collaboration in these important issues that affect each and
    every one of our constituents, and our communities, and our
    State's economics.
        I am going to move on, Mr. DeJoy. The last time you
    testified before this Committee, we discussed my concerns for
    your proposal for the Reno Processing and Distribution Center.
    The proposal, as originally crafted, could have led to
    significant delays in mail delivery. While I appreciate that
    after months of pushing, USPS finally responded to my calls to
    keep in-State mail letter processing at Reno.
        I do remain concerned about the overall implementation of
    your Delivering for America plan. According to the USPS online
    performance dashboard, while the standard for receiving
    delivering mail in Reno's two days, USPS is currently averaging
    three to four days in certain ZIP Codes in Reno. Can you speak
    specifically to Reno, if you may, what the USPS is currently
    doing to get our delivery times down in Northern Nevada to the
    two-day standard and when we might expect that?
        Mr. DeJoy. Right now, of course, and I do not have
    specifically to Reno, but I believe Reno area, all of--I don't
    want to even say Nevada.
        Senator Rosen. If you come here, could you please learn to
    say Nevada properly? It is kind of respectful. I appreciate
    that.
        Mr. DeJoy. No disrespect intended.
        Senator Rosen. Do you say Illinois, if you go to talk to
    the Senator from----
        Mr. DeJoy. Why are making fun of me?
        Senator Rosen. It's a matter of respect. You have been for
    this through this body multiple times.
        Mr. DeJoy. Maybe that's way I speak. Why are you making fun
    of me?
        Senator Rosen. I am not making fun of you, sir. You are
    making fun of me. I would like to see the respect due to my
    State of Nevada, which is experiencing problems in their mail
    delivery service. When can we expect mail delivery back down to
    the two-day standard?
        Mr. DeJoy. 50 percent of market-dominant mail and packages
    gets delivered a day in advance. We are at about 85 percent in
    on time, 95 percent the day, a day later. We are going to be in
    that condition for probably the next 8 to 12 months when I
    expect that all mail through the system reaches its intended in
    four days. The average time is 2.8 days across the Nation for
    mail to be delivered.
        Senator Rosen. Thank you. I would like to move on and talk
    about the treacherous conditions on the Donner Pass on I80,
    which we did speak about also last time. It is the only way to
    get from Reno to Sacramento. A path that you had in your
    original plan to redistribute mail processing from Reno would
    have relied for mail to travel out of Nevada.
        Then of course, back again, as I mentioned, at that time,
    Donner Pass has some of the most extreme weather in the United
    States, with over 33 feet of snow annually. Just a few days
    ago, Donner Pass, again was closed due to heavy snowfall. You
    said you did not have the data last time. Do you have any data
    that you could share with us today on how the weather
    conditions in Donner Pass may have been affecting the Postal
    Service. As we know, it's closed on over an average of a month
    a year during various times due to wildfire, snow, and high
    winds since you testified in April. Would you be willing to
    provide me that information if you don't have it here today,
    and how it impacts our service?
        Mr. DeJoy. We were speaking about that with regard to the
    collection mail, the turnaround mail that was going back into
    the Reno area. I made a trip out to Reno, actually, to look at
    the plant and the operation. For a variety of reasons we took
    an alternative course.
        The turnaround mail will not go through the Donner Pass, it
    will stay local. Mail going out to the rest of the Nation will
    go through the Donner Pass or whatever other direction that we
    have when it is closed. We are well aware that it is closed.
        We have alternate types of arrangements throughout
    transportation to move to Sacramento, where the main outgoing
    processing plant is going to be. I don't have any other
    specifics, but I can get our routings from transportation and
    show you what we do when it's closed. I can have that sent to
    you.
        Senator Rosen. Thank you. I want to talk a little bit about
    Regional Transportation Optimization (RTO), because in October
    you submitted a request for an advisory opinion from the Postal
    Regulatory Commission in which you proposed a series of
    operational changes. One such change is your Regional
    Transportation Optimization,
        Under this proposal, mail collected at post offices and ZIP
    Codes more than 50 miles away from the nearest regional
    processing center and distribution would have their morning and
    afternoon drop off and pick up activities consolidated into a
    single route.
        With the Postal Service already failing to meet many of its
    performance goals, I am concerned you want to cut the volume of
    routes. Senator Hassan, I think is concerned about the same
    thing. This proposal really unfairly impacts our rural mailers
    especially in receipt of their Social Security checks, their
    medications, and some of those.
        Despite concerns that I know many of us have shared with
    you, you have decided to move forward, which I believe is a
    misguided proposal in citing a yet to be proven gains in
    efficiency along the later legs of delivery. Have you conducted
    an analysis that conclusively prove that any delays in mail
    originating in rural areas will be mitigated by the subsequent
    gains in efficiency, or is this merely conjecture?
        Mr. DeJoy. We have done extensive analysis on the total
    operational changes that we are presenting and the cost
    savings. First off, delivery into these areas will be enhanced
    because most mail, almost 90 percent of mail packages,
    originates within a 50-mile radius and nothing is changing to
    the delivery. So, that will happen.
        With the collection, a single-piece mail somebody mailing a
    letter, the most that it will be affected is one day allocated
    across five days. It will still be no longer than five days to
    get to the furthest part in the Nation.
        Senator Rosen. And you have data? You have a report to
    support this?
        Mr. DeJoy. Yes. It's all filed with the Postal Regulatory
    Commission.
        Senator Rosen. Thank you. I want to just quickly ask this
    last question. We have contingency plans. We have bad weather
    across our nation many different times of the year. Of course,
    I am concerned about our particularly bad weather up in
    Northern Nevada, along the I80 route. Do you have contingency
    plans in place if routes like ours in Reno, subjected to the
    RTO initiative become impassable? I am not the only person that
    may have roads that are impassable. I am sure if you speak with
    the Chair, he will tell you about roads that are impassable in
    the Upper Peninsula of Michigan, and you could probably go
    after State to State. Do you have a contingency plan in place
    due to weather conditions?
        Mr. DeJoy. We have alternate routes and actions that we
    take. We have been delivering mail for 250 years. We have
    alternate actions that we take with every disaster road
    closure, hurricane, and so forth. Does it get it there the same
    time? That depends on the consequence of the event we are
    talking about. But we do have methodologies that we deploy
    readily to make sure that the mail gets delivered and
    collected.
        Senator Rosen. Thank you. Thank you, Mr. Chair.
        Chairman Peters. Thank you. Senator Ossoff, you are
    recognized for your questions.

                  OPENING STATEMENT OF SENATOR OSSOFF

        Senator Ossoff. Thank you, Mr. Chair.
        Postmaster General, prior to your efforts to implement
    Delivering for America and move to the Palmetto facility in
    Georgia, on-time delivery for First-Class Mail in North Georgia
    was over 90 percent, correct?
        Mr. DeJoy. Not so.
        Senator Ossoff. Not so? What was on-time First-Class Mail
    delivery in Georgia prior to the changes that you implemented
    at Palmetto?
        Mr. DeJoy. Atlanta was always in the bottom 20 percent of
    our service standard across the Nation because----
        Senator Ossoff. No. My question is what percentage of
    First-Class Mail?
        Mr. DeJoy. I do not remember. It was probably in the low
    80's. Single-piece First-Class Mail was definitely in the low
    80's.
        Senator Ossoff. In the midst of the changes that you
    implemented mid-spring, that declined to 36 percent, correct?
        Mr. DeJoy. We have been through this, yes, it has.
        Senator Ossoff. We have been through this. We are going
    through it again.
        Mr. DeJoy. OK. Let's go
        Senator Ossoff. On time delivery of First-Class Mail in
    Metro Atlanta in North Georgia, late spring, was 36 percent,
    correct?
        Mr. DeJoy. That is correct.
        Senator Ossoff. You said at the hearing in April that we
    would be, ``Where we need to be in about 60 days,'' correct?
        Mr. DeJoy. I believe so. Yes.
        Senator Ossoff. It's been 233 days. Sound right?
        It's been 233 days. On-time delivery of First-Class Mail in
    metro Atlanta and in North Georgia is now at 75 percent,
    correct? Are we where we need to be?
        Mr. DeJoy. Where we are going to be for a little bit, yes.
        Senator Ossoff. Are we where we need to be?
        Mr. DeJoy. Where we are going to be.
        Senator Ossoff. It's a simple question. Do you believe that
    75 percent?
        Mr. DeJoy. I think for right now----
        Senator Ossoff. On time delivery of mail in North Georgia
    is where we need to be?
        Mr. DeJoy. 50 percent of First-Class Mail in Georgia gets
    delivered a day in advance. We are in the 75 to low 80's on
    time, and 90 percent is the day after. While we are doing our
    transitions, that's where we are going to be. That's one of the
    reasons why we have other types of service-related issues that
    are----
        Senator Ossoff. Yes. My time is limited. Let me assure you
    that for my constituents in Georgia, the mail being delivered
    on time, 75 percent of the time is not where we need to be when
    you said 233 days ago that we would be where we need to be in
    60 days.
        Mr. DeJoy. Yes.
        Senator Ossoff. Delivering for America plan projected
    positive net income for USPS starting in Fiscal Year (FY) 2023.
    Is that right?
        Mr. DeJoy. That's correct.
        Senator Ossoff. In fiscal year 2023, you had a $6.5 billion
    loss, correct? In fiscal year 2024, you had a $9.5 billion
    loss, correct?
        Mr. DeJoy. Correct.
        Senator Ossoff. You had projected for Fiscal Year 2024, a
    $1.7 billion gain, correct?
        Mr. DeJoy. I do not remember.
        Senator Ossoff. Yes, that's correct. Would you say that
    your tenure has been a success?
        Mr. DeJoy. I would say that the 10-year plan has not
    reached what the plan said it would be, but I do believe----
        Senator Ossoff. Sorry, not your 10-year plan, your tenure.
    Has your tenure as Postmaster General been a success?
        Mr. DeJoy. Senator, I know how you feel about me. You have
    been quite public, OK, so I am not going to debate that you
    think I am a failure. Fine, I do not.
        Senator Ossoff. It's not about how I feel about you,
    Postmaster General. It's about whether or not seniors in
    Georgia are receiving prescriptions. It's the stacks of boxes
    of mail from courts that never arrived to their destination.
    It's the small businesses who are not able to get products to
    market.
        Mr. DeJoy. That package----
        Senator Ossoff. This is my time, Postmaster General.
        You are here under oath before the U.S. Senate.
        Mr. DeJoy. I know where I am.
        Senator Ossoff. It's small businesses who cannot operate.
    It's death notices not delivered to family members. You are
    sitting here trying to explain that 75 percent on-time delivery
    is a success. It's not about how I feel about you, Postmaster
    General. It's how my constituents are being served by the
    United States Postal Service.
        Let me ask you a question about the Palmetto facility in
    Georgia. Have there been any deaths in the Palmetto facility in
    the last year?
        Mr. DeJoy. Any deaths?
        Senator Ossoff. Deaths.
        Mr. DeJoy. I have a lot of events throughout the course of
    the year. I do not remember specific. I have a lot of deaths
    throughout the course of the year. I do not remember
    specifically Palmetto. No.
        Senator Ossoff. How many deaths of personnel on the job
    would you say you have had nationwide in the last year?
        Mr. DeJoy. I would probably say 10 in the course of a year.
        Senator Ossoff. You had a death in the Palmetto facility
    last year. Will you provide my office in this Committee with
    all materials relevant to that death?
        Mr. DeJoy. Absolutely.
        Senator Ossoff. When will on-time mail delivery be restored
    to the level prior to you trying to make these changes for my
    constituents in Georgia? You said in April we would be where we
    need to be in 60 days.
        Mr. DeJoy. First of all, I disagree with the premise
    because the service is probably at the level of service where
    you were before I started these changes.
        Senator Ossoff. We are not.
        Mr. DeJoy. Yes, we are.
        Senator Ossoff. I have the numbers in front of me. We are
    not.
        Mr. DeJoy. I do not know what numbers you got.
        Senator Ossoff. I have your on-time delivery statistics,
    you are not where you were before you tried to make this change
    in Georgia. You are at 75 percent on-time delivery in Georgia.
    When will you be?
        Mr. DeJoy. When we started the Delivering for America plan,
    Service in Georgia was terrible. Aspects of the Delivering for
    America Plan brought that service up. We were close to 90's
    across the board. That was part of the Delivering for America
    plan. When we opened the new plant is when we had our issues.
    Service went down, and we are recovering from it now. It's part
    of when we get to where we want to be, it's going to be part of
    the whole broad filing that we have with the PRC right now,
    where some of the service business rules that are 30 years old,
    that should have been changed are affecting how we measure
    service.
        There's a bunch of other things that need to come together
    to get the service where it is. In all, service in Georgia is
    within less than three days, people get all their mail packages
    and everything. That will be the target, what we are trying to
    shoot for.
        Senator Ossoff. You just lowered your targets for next
    year, correct?
        Mr. DeJoy. I lowered the targets for next year to put that,
    what I just said, out into the public. That this is what it's
    going to look like.
        Senator Ossoff. You lowered your targets for next year so
    you could meet your targets?
        Mr. DeJoy. I can make the changes that we need to make to
    provide a viable United States Postal Service.
        Senator Ossoff. Postmaster General, you are not meeting
    your financial targets. You are hemorrhaging cash when you said
    you'd be making money. Delivery in Georgia has been abysmal
    this year. You have not recovered, as you said, you would, you
    need to do better for my constituents in Georgia.
        Mr. DeJoy. Yes, sir.
        Chairman Peters. Senator Hawley, you are recognized for
    your questions. Thank you for deferring to some of our
    colleagues here. That was very kind.

                  OPENING STATEMENT OF SENATOR HAWLEY

        Senator Hawley. Absolutely. Thank you, Mr. Chair. Mr.
    DeJoy, good to see you.
        Let me ask you about the Regional Transportation
    Optimization plan. A couple of my colleagues had questions
    about this, and maybe you can clear up some things for me. My
    understanding is that this plan will eliminate end-of-day
    collection at post offices that are located more than 50 miles
    from a hub. Is that, basically, correct? I Am sorry, eliminate
    end-of-day collection from post offices that are located more
    than 50 miles from the hub. Is that, basically, right?
        Mr. DeJoy. Most likely in most places.
        Senator Hawley. OK. It's going to eliminate end-of-day
    collection at most post offices located more than 50 miles from
    one of the hubs.
        Now, in Missouri, we have 926 post offices. 754 of them are
    more than 50 miles from a hub, and that accounts for 50 percent
    of my State's population. I understand that under your own
    agency's projections, 68 percent of rural single-piece, First-
    Class Mail will get downgraded under this plan. That's going to
    be half my State. Can you walk me through that?
        Mr. DeJoy. Yes. I would have to look at what we are saying
    in terms of local cancellation, because I think in Missouri, we
    decided to keep another local cancellation plant. But it will
    be one or two plants. So, to some certain extent, you are right
    that there's a bunch of offices that are outside that would get
    what we say is the ``plus one day'' where we would send a truck
    out when we deliver mail and take it back, which is an obvious
    cure for an inefficient process.
        We will then accelerate within the reach of the plant that
    it goes to. We will accelerate through the system. We will pick
    up time there. Across the country, we will pick up time because
    we will deploy pre-operating practices that get us on the road
    about four hours earlier. That's going to get us further.
        With regard to the impact, the 68 percent, it's not that
    much. It's single-piece mail outbound only. Eighty eight
    percent of mail originates from within a 50-mile radius. All
    that delivery will be picked up by that four-hour process
    moving through the system. All delivery into all your
    constituents everywhere, will be better in terms of the
    delivery site.
        It's only the outbound collections that come and go through
    this that get the extra day within the one, two-, three-, four-
    , and five-day span that we have right now. A two-day may go to
    three days, a three-day may go to four days, a four-day may go
    to five days, but nothing's going beyond five days. We have
    tens of thousands of trucks running around with nothing in
    them, and that is a big reason to make the change.
        I think, within on a single-piece mail, and I am not
    diminishing its importance, but somebody mailing a letter, a
    card, or something like that may get a day later within the
    five-day constraint.
        Senator Hawley. Yes. Thank you for confirming that. My
    concern is that that's going to affect half of my State, 754 of
    my State's post offices. This is on top of downgrades that
    happened in late 2021. This is, as you can understand, I am
    sure, this is why the Missouri Farm Bureau has written to you
    opposing this. All of my rural electric cooperatives are
    opposed to this.
        This is disproportionate impact on rural folks. I
    understand that some urban areas will also experience
    downgrades, but to them, your own estimates say it will be a
    third of their volume. It's two-thirds, more than two-thirds of
    the rural volume. I mean, why the disproportionate impact on
    rural folks?
        Mr. DeJoy. It actually has more of an impact on urban
    areas. The impact is like 60 percent urban, 40 percent rural.
    You have urban areas have sprouted up. The postal system was
    built, 30's and 40's, and the geography has greatly changed.
    There are urban areas.
        I need to get cost out. This is extremely, I do not believe
    that this is a punitive way. We focus on delivery. We are
    delivering to 167 million delivery points every day. We set the
    constraints around the five-day service. It only affects
    single-piece. All their deliveries, all their everything that's
    going to them is going to be timely. The local cancellation
    reach, I can get back to you as to what that reach is going to
    be from the one or two plants. That will take that out of the
    delivery--out of the impact zone.
        But at the end of the day, this is a change we need to make
    to get the cost out. We we're chasing $3.7 billion up, and this
    is all about rural America, Senator.
        Senator Hawley. You are reducing the volume to rural
    America. I mean, you are slowing it down. They are getting the
    downgrade. 68 percent of their mail is going to get downgraded
        Mr. DeJoy. Significantly more volume gets delivered to
    people in rural America, in every place, than they actually
    mail out. Significant. It's disproportional inbound than out.
        Senator Hawley. But you do not dispute the fact that 68
    percent of their single-piece, First-Class Mail is going to get
    downgraded. You just told me that it would get downgraded.
    Listen, I think I understand you; you are trying to cut costs.
    I am just telling you, I understand your position, Mr. DeJoy,
    but I need you to understand mine.
        I represent a State that's majority rural. 754 of my 926
    post offices are going to experience additional delay. This is
    on top of the fact that in the Kansas, Missouri District, you
    are hitting a 72 percent on-time delivery standard. That's well
    beneath your own target. I am just telling you that in my
    State, people they are very frustrated.
        The Farm Bureau represents 157,000 Missouri Farm families.
    They look at your plan and they say, ``What in the world? We
    are going to get the shaft here.'' Just to be honest with you,
    I am just telling you the facts. This is how in my State, this
    is how it seems.
        Mr. DeJoy. I think the alternatives are that we get some
    significant government funding because we were going to run out
    of cash. When I got here, we were going to run out of cash. We
    have worked very hard to find a way. You see, I try and do one
    single move in efficiency, and there is no enjoyable answer for
    anybody here. We think this is a way that continues to get
    good, reliable.
        It is a change. It's a change that should have been made 20
    years ago. Right? There's a big heavy lift here because
    nothing's been done for 20 years. The impacts are not unfelt. I
    understand that. It's scary to many people. I understand that,
    too. But I think we have made a determination that this is what
    our role is to try and define and evolve as to what the service
    is.
        We are looking at improving inbound service significantly
    keeping cost affordable, keeping the Postal Service alive. Yes,
    there will be an impact on some collection, single-piece mail.
        Senator Hawley. You have asked the Postal Regulatory
    Commission, I think, for an advisory opinion on this. If they
    issue a negative opinion, will you stop moving forward with the
    implementation of this plan?
        Mr. DeJoy. We will evaluate everything that they say, and
    take it seriously, and make adjustments. They had their
    testimony yesterday. We had our testimony yesterday. They
    started with negative connotations on the plan, which makes me
    question their understanding of what the condition that we are
    in and the things we need to do.
        But we will take, like every input that we get, we will
    take it seriously and make adjustments. But I think there's an
    overwhelming propensity for us to move forward, and we should
    expect that.
        Senator Hawley. I want you to know, and I want you to
    expect that I hate this plan, and I am going to do everything I
    can to kill it. I am going to try to protect every delivery to
    the State of Missouri, to my rural areas.
        I just want you to know we are on the same page. I want you
    to know I am going to go to the mat on this, and I am going to
    work with everybody I can across this to protect delivery to
    rural America. If I have to go down with the ship, I will go
    down with the ship, but I am going to do everything I can to
    kill it.
        Mr. DeJoy. Yes. You won't go down with the ship. If you are
    successful, the Postal Service will go down.
        Senator Hawley. No. If I am successful, rural America will
    get its mail delivered on time, which is currently not. Urban
    areas will get their mail delivered on time, which is currently
    not. Who's paying for it? The taxpayers who have been paying
    for it all along. We just, in 2021, gave you a bill that you
    wanted, Mr. DeJoy, that reduced your liabilities by tens of
    billions of dollars.
        Listen, I have been nice to you until now, but frankly, I
    am a little tired of this. We have waited, and we have waited,
    and we have waited for better delivery. I have written you
    letters like I cannot count talking about the delivery in the
    Kansas City area, which is appalling, talking about the
    delivery to rural area. We have got the Baring Post Office,
    which has been completely decimated for two solid years, that
    has now been rebuilt by a private party, that your agency still
    has not cleared and opened.
        Yes, I am not happy about it. I have been nice to you today
    and up until now, but you have exhausted my patience on this. I
    just want you to know it because I represent a State whose
    patience is exhausted. I have leveled with you now. I think we
    understand each other. But I want to see service to my State
    and the rural areas of my State preserved. In the urban areas,
    I want to see it get better and meet the standard. I want the
    Baring Post Office rebuilt and open like you promised me it
    would be when we were here in April and it still isn't as we
    sit here in December.
        That's my piece, that's where we are just so we understand
    each other, and I look forward to working with you going
    forward.
        Mr. DeJoy. Yes, I understand you. I do not think you
    understand me.
        Chairman Peters. Senator Marshall, you are recognized for
    your questions.

                 OPENING STATEMENT OF SENATOR MARSHALL

        Senator Marshall. Thank you, Mr. Chair. Welcome, Postmaster
    General.
        Certainly, I understand you have an impossible job and I'd
    hopefully have time to ask you why is it impossible. But I want
    to start. We asked some folks back home, if you could be in
    front of the Postmaster General, what questions would they ask
    you? this first one is from Mike from Topeka, and Stacy from
    Marysville had the same question. ``What is justifying the
    consistent price increases with no change or improvement in
    delivery time or service?''
        Mr. DeJoy. Senator, we had a defective pricing model for 20
    years. Mail volume cut in half, and we were not allowed to
    raise our prices to accommodate that, the basic division that
    would have told anybody that we needed to have a significant
    increase in price. Also, during the time period that I have
    been here in raising prices, we have had 20 percent inflation.
        Under any circumstance, the prices that we have, the only
    thing we have raised our prices have been mostly the inflation,
    and that is the case. The service was deteriorating when I
    walked in the door, it had been bad. It was getting worse, and
    the trajectory has to be stabilized before we start getting
    back.
        Senator Marshall. Thank you. I will go to the next
    question. This one's from Dana, from El Dorado. ``A lot of
    folks in rural Kansas do not get their mail in a timely manner.
    First-Class Mail used to get anywhere in the United States in
    two to three days. What changed?''
        Mr. DeJoy. The standard is five days now.
        Senator Marshall. The standard is five. Why? Why was the
    standard changed?
        Mr. DeJoy. Because mail volume had declined 50 percent.
    Over 50 percent. We spent $3.5 billion flying mail around the
    country to meet the three-day standard when I got here, and we
    are running 50,000 trucks a day empty, right? I do not own
    planes. We canceled those contracts that were flying, all the
    stuff. We put everything on truck and that's on a ground
    service, and that is our big initiative now.
        Senator Marshall. Has that project been successful?
        Mr. DeJoy. Yes. We have taken $1.5 billion out of our
    transportation budget. We got service up to the 90's across the
    board until we started making these physical distribution
    changes which are painful.
        Senator Marshall. OK. Next, we sent a poll out to over
    400,000 Kansans this week. Everybody was not a push poll. Over
    half of the Kansans in their mail said their mail delivery
    services are unreliable. Over half of Kansans said the mail
    delivery services are unreliable, and nearly 70 percent said
    they have personally experienced delays in the past year. How
    do you measure success? Certainly, you are not going to call
    that success, I would assume?
        Mr. DeJoy. Now, we have issues in Kansas. I am aware of the
    service issues in Kansas, and we are working on a--the plant
    there is old. It's a three-story building. There are other
    operational issues that we have issues in Kansas, and I am
    working a strategy specifically to enhance the service in
    Kansas.
        That is not a result of anything in the plan, right, it's a
    result of operational issues that we have in Kansas. I
    recognize it's there, and we are going to fix it.
        Senator Marshall. How would you measure success?
        Mr. DeJoy. In Kansas?
        Senator Marshall. I assume there's some metric that says
    the average number of days. Are you meeting the five-day
    standard? I guess, how do you follow that?
        Mr. DeJoy. I still think when you look at Kansas, 50
    percent of market-dominant mail and packages get to where they
    are supposed to be a day in advance of a standard. We have, in
    your case, you said 77. We might be 77 percent on time, but the
    next day we are within 90. We are in the 90's. Right now with
    all the transitions of the traffic coming in and out that we
    need to make, I think that is that is part of the consequence
    of the damage that has been done to the organization over the
    past two decades.
        Senator Marshall. My next question, Postmaster General. The
    city of Winchester, Kansas, has been without a post office
    building since October, 2020. city officials have been provided
    with a draft lease from the USPS, but have not received a
    signed, finalized lease allowing them to begin to construct a
    new building. Can I get your commitment today that a finalized
    lease will be returned to the city of Winchester by the end of
    this year?
        Mr. DeJoy. By the end of this year? I know that's in
    process. I will check out with the timing with----
        Senator Marshall. What's a reasonable time then, if it's
    not by the end of this year?
        Mr. DeJoy. Sure. Let me get back to you. I will go check on
    that one when I get back to the office. I am trying to
    accelerate all our leasing practices. It is a laborious
    endeavor.
        Senator Marshall. It's Winchester, Kansas.
        Mr. DeJoy. Yes.
        Senator Marshall. I think you kind of alluded to this audit
    by the Inspector General in the Kansas City region. What's
    getting better there? Tell me just what's improving? How are
    you measuring that? Can we expect improvement in six months, in
    three years?
        Mr. DeJoy. I think in the coming year, Kansas is in the
    middle of the country. Most of the service is three-day service
    in and out of the country. That's a tough service lane for us
    now because we are trying to stretch the transportation dollar
    and fill our trucks. It is cumbersome when we are looking at
    some new routings and some new transportation modes that I
    think over the next six months, we will start to see them take
    shape.
        When I got here, there was the tail of the mail. If it did
    not get there on time, it disappeared for 10 days. We are
    really focused on this window of within three days.
        Senator Marshall. OK. I am going to close with this
    question. Postmaster General, explain to me where the
    resistance is. I think you are sincere. I think you want to fix
    the Post Office. I do not know that I could fix the Post
    Office, besides throwing money at it. Where's the resistance? I
    just feel like when--I can see the strain in your voice that
    you want fix this. You came in here, you want to--who's the
    resistance to fixing this problem?
        Mr. DeJoy. I think there's a romance with an organization
    that, long ago, lost its ability to do the service that
    everybody expected. That is what's at the issue here, right? It
    was obvious in the past, we let it go. There was a significant
    resistance to any--I have calls with Congressmen, Senators that
    even understand my plan. They say just not in my district. Not
    here, not there, right? I have my own people, 640,000 people,
    that need to learn how to operate like FedEx and UPS. That's
    the only way we survive.
        Senator Marshall. That sounds like resistance to me?
        Mr. DeJoy. It's not resistance.
        Senator Marshall. So, FedEx can do it, but you guys cannot?
        Mr. DeJoy. It would have been easier for me to build a new
    postal service than to transition this one. Because we are also
    delivering 400 million pieces of mail and packages a day.
    Right? 400 million. You know, pretty reliable, too, if you say
    within three days. Pretty reliable if you tie all the other
    regiments that we have, right?
        We have a postal regulatory organization, a regulator, that
    does not understand modern day logistics, and productivity, and
    aggregation, right? We have a laborious process. We have
    significant unfunded mandates that are given upon us by this
    Congress, right? I can go on, sir.
        Senator Marshall. Thank you, Mr. Chair.
        Chairman Peters. Thank you. Postmaster General DeJoy, thank
    you for being here today. As you heard, Members of our
    Committee have lots of questions, and we appreciate you being
    here to answer those questions as we continue to exercise our
    oversight role as a Committee.
        The record for this hearing will remain open for 15 days
    until 5 p.m. on December 19th, 2024, for the submission of
    statements and questions for the record. This hearing is now
    adjourned.
        [Whereupon, at 11:45 a.m., the hearing was adjourned.]

                                A P P E N D I X

                                  ----------

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                     [all]