FIRM PICK-UP PROCEDURES

The San Francisco Division's Firm Pick-Up Procedures have been reassessed and revised. Pick-up service will only be offered Monday through Friday, except Holidays, and all pick-up service will be scheduled. The conditions under which we will pick up mail

are:

FULL RATE FIRST CLASS MAIL:

Mail must be automation compatible letter mail averaging at least 2,000 pieces per pick-up day.

The pick-up must be scheduled so that the mail arrives at the GMF by 1600.

"Advanced-dated mail" (bearing next day's meter date), satisfying the volume minimums can be scheduled for pick-up as late as 2200.

- Other mail (Pre-sorted FCM, Priority, Express) that the customer has ready at the dock when the morning or afternoon pickup is made will be transported to the GMF provided vehicle capacity permits.

PRE-SORT/DOCK-TRANSFER FIRST CLASS MAIL:

- Volume must average a minimum of 180 trays of automation compatible letter mail. The "banded" and "labeled" trays must be loaded into containers by destination so that the containers may be cross-docked at the GMF after acceptance clearance. (Details of container loading schemes available on request.)

- Mail destinating in the San Francisco Division or in the Oakland MSC must be scheduled to arrive at the GMF no later than 1600.

- Mail destinating in other Northern California offices must be scheduled to arrive at the GMF by 1300.

Other mail (Full Rate FCM, Priority, Express) that the customer has ready at the dock when the pick-up is made will be transported to the GMF provided vehicle capacity permits.

MAIL TRANSPORT EQUIPMENT:

There will be no trips exclusively for delivering Mail Transport Equipment to customers.

- Arrangements can be made by customers to have equipment delivered to them at the time the mail pick-up is accomplished, provided vehicle capacity permits. These arrangements can be made by calling the Logistics office at 550-5043 a minimum of 24 hours in advance.

The Committee on Post Office and Civil Service began its annual oversight hearing on the United States Postal Service in early May.

The

We would appreciate your participation, and that of your designees, at the hearing that will be held on June 9, 1992. hearing is scheduled to begin at 10:00 a.m. in room 311 of the Cannon House Office Building. This hearing will explore the recommendations of the joint Postal Service Governors\Postal Rate Commissioners Task Force on the ratemaking process.

Committee rules require that copies of written testimony be submitted in advance. It would be helpful if you could provide 100 copies of any such testimony to the Committee office (room 309 Cannon) no later than Friday, June 9. Jerry Cerasale, of the Full Committee staff, is available if further assistance is required (225-4054).

Mr. MCCLOSKEY. Thank you, Mr. Seiffe, for a very forthright and succinct statement.

Boiling it down, you think this committee and other pertinent committees need to get more into the analysis of the regulatory process. I understand that. Quite frankly, there is only so much time that we have as we go about numerous other legislative responsibilities. But what do you feel is the trend as far as Postal Service openness and cooperation with your regulatory concerns, preferences, and fears? There is some consultation going on, as you say, right?

Mr. SEIFFE. Oh, yes.

Mr. MCCLOSKEY. It isn't just constant slamming or whatever.

Mr. SEIFFE. On the one hand, all of the effort that you make to set up the most perfect ratemaking process is all moot if your regulatory process is not in control. I will say, to answer your question directly, that the Postal Service has been much more forthright than they have in the past. Yet, we still have a schism that goes on between some parts of the management and some parts of the operation. They say it is our objective to provide an environment where we can achieve the lowest possible cost and meet all of the other panelists' objectives, yet you have, in the field, a great problem of getting it done, and that is really my biggest fear, the schism between those two right-thinking, I think-headquarters people and divisional people don't quite see it that way.

Mr. MCCLOSKEY. Within the Post Office itself then to some degree?

Mr. HAYES. Thank you, Mr. Chairman. I want to express my appreciation to Mr. Seiffe for his testimony. I have no questions. We have to go vote now on yesterday's nonactivity.

Mr. MCCLOSKEY. Yes. I think it is a vote on yesterday's numerous activities.

Thank you very much, Mr. Seiffe.

Mr. SEIFFE. Thank you very much.

Mr. MCCLOSKEY. I want to thank again everyone that participated. I appreciate your time today. Thank you.

[Whereupon, at 12:07 p.m., the committee was adjourned.]

[Additional material received for the record follows:]

Thank you for providing the National Newspaper Association (NNA) with the opportunity to participate in the Committee's Postal Service oversight hearing. In response to the questions received from the Committee in writing on September 4, 1992, I herewith enclose NNA's written answers.

1.

In the Joint Task Force Report, the members recommend the four-year rate cycle based directly on the Postal Service's strategic plans with rate adjustments occurring in mid-cycle, if necessary. Do you believe that a contingency reserve is necessary under this proposal? How should prior year losses be treated?

1. NNA does not wholly support the four-year rate cycle. Our concerns are two-fold: 1) that it would create excessive discretion for the Postal Service to shift the rate burden upon the captive customers to provide rate advantages for users of mail classes and sub classes in which the USPS has competition; and 2) that it would lead, in fact, to more frequent and even less predictable increases for small newspapers. If the four-year cycle is created, however, it would seem to NNA as if contingency reserves would be far less essential. Prior year losses should be carried forward to a full omnibus rate case. On the other hand, Postmaster General Runyon's efforts at lengthening the rate cycle through cost control may have overtaken the need to make this procedural change.

2.

Under the current system set up in Title 39 USC there are no real incentives for the Postal Service to control costs. Do you have any suggestions on what Congress might do to improve Title 39 to provide incentives for cost control in the Postal Service?

2.

Cost control is essentially a management responsibility. Congress can provide oversight of management's success in that arena, but the key to cost control is held by the Postmaster General. Clear, specific management objectives to achieve service standards, competitively award contracts and control supervisory costs are well within the Postmaster General's current authority and responsibility. NNA supports General Runyon's attempts to exercise that authority and responsibility and is monitoring service closely to determine whether service will be affected.

Chairman William L. Clay Committee on Post Office and Civil Service

Page 2

3.

Have you been experiencing service problems? If so, would you please elaborate on what types of delays and other problems that have been occurring?

3.

Yes, virtually all NNA member newspapers, and my firm's publications, have experienced service problems on a continuing basis. They vary by region/state in severity and frequency, and are difficult to quantify. We can provide some overview, however.

Service problems of late seem to be exacerbated by:

1)

Creation of Area Mail Processing centers for automated mail, especially in more rural areas such as South Dakota, Wyoming, Iowa. North Dakota, Nebraska, Kansas, Kentucky, etc.

Despite assurances of HQ mail personnel that non-automated flat mail shouldn't be routed to these new centers, it is happening in virtually every instance of complaint. Since truck routes are changed, the Second Class flat mail follows the automated First Class. With fewer of these centers, mail is travelling even more circuitous routes than ever, sometimes going 300-400 miles to get back 30-50 miles from deposit. We've had delays caused by the London, KY, AMP center, for instance. Huron, SD has been another trouble spot. Sometimes smart mailers can find entry times that beat that routing, but most small publishers don't know how to deal with the intricacies of postal transportation schedules.

2) Elimination of highway contract routes with "low" volume, especially many between contiguous sectional centers. I just became aware of the drop of such routes from Lafayette, IN to Champaign and Kankakee, IL, Terre Haute, IN to Champaign, IL and Ft. Wayne, IN to Jackson, MI. Mailers (at least newspapers) are not informed of these changes before they happen. Only when we get service complaints can we find out by inquiring. The Transportation Management Sectional Centers seem to have lots of autonomy to make cuts without accountability.

Some mailers believe that USPS could contract for smaller trucks to handle minimum volumes, or contract with other firms travelling the same routes, to keep service intact.

3)

The service standard changes in 1990-91 moved literally hundreds of areas from one-day to twoday delivery. Rural areas are particularly impacted. Some areas are "black holes" with service way below standard. (For instance, a Priority Mail package from Washington, DC to Tell City, IN took six days to arrive, triple the standard.)

Note: I can provide specific letters of complaint to back up many of the assertions above, if desired by the Committee.