Postal Service makes changes after losing $2.2B in 3 months

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WASHINGTON — The U.S. Postal Service says it lost $2.2 billion in the three months that ended in June.

The new postmaster general, Louis DeJoy offered a gloomy picture of the 630,000-employee agency Friday in his first public remarks since taking the top job in June.

“Our financial position is dire, stemming from substantial declines in mail volume, a broken business model and a management strategy that has not adequately addressed these issues,’’ DeJoy told the postal board of governors at a meeting Friday.

“Without dramatic change, there is no end in sight,’’ DeJoy said.

While package deliveries to homebound Americans were up more than 50%, that was offset by continued declines in first-class and business mail, even as costs increased significantly to pay for personal protective equipment and replace workers who got sick or chose to stay home in fear of the virus, DeJoy said.

Without an intervention from Congress, the agency faces an impending cash flow crisis, he said. The Postal Service is seeking an infusion of at least $10 billion to cover operating losses as well as regulatory changes long sought for that would undo a congressional requirement that the agency pre-fund billions of dollars in retiree health benefits.

The agency is doing its part, said DeJoy, a former supply chain executive, who took command of the agency June 15. DeJoy, 63, of North Carolina. He is the first postmaster general in nearly two decades who is not a career postal employee.

In his first month on the job, DeJoy said, he directed the agency to vigorously “focus on the ingrained inefficiencies in our operations,’’ including by applying strict limits on overtime.

“By running our operations on time and on schedule, and by not incurring unnecessary overtime or other costs, we will enhance our ability to be sustainable and ... continue to provide high-quality, affordable service,’’ DeJoy said.

DeJoy said the agency will “aggressively monitor and quickly address service issues.’’

DeJoy’s remarks came as lawmakers from both parties called on the Postal Service to immediately reverse operational changes that are causing delays in deliveries across the country just as big volume increases may happen if mail-in election voting in some states takes place.

In his remarks to the postal board of governors, DeJoy called election mail handling “a robust and proven process.”

While there will “likely be an unprecedented increase in election mail volume due to the pandemic, the Postal Service has ample capacity to deliver all election mail securely and on time in accordance with our delivery standards, and we will do so,” DeJoy said.

“However ... we cannot correct the errors of (state and local) election boards if they fail to deploy processes that take our normal processing and delivery standards into account.”

Later Friday, DeJoy released another memo detailing changes that reshuffle dozens of officials on his executive leadership team. The former chief operating officer, David Williams, was moved to lead logistics and processing operations, while Kevin McAdams, vice president of delivery and retail operations, was removed from leadership.

DeJoy said the changes — which also include a management hiring freeze — would improve efficiency and “align functions based on core business operations.’’

Eighty House Democrats and four Republicans signed a letter blasting the changes and urging an immediate reversal. “It is vital that the Postal Service does not reduce mail delivery hours, which could harm rural communities, seniors, small businesses and millions of Americans who rely on the mail for critical letters and packages,’’ the House members wrote.

—AP stories contributed to this report.

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