USPS reaches tentative agreement with American Postal Workers Union

By Jeff Berman · March 15, 2011

The United States Postal Service (USPS) said yesterday that it has reached an agreement with the American Postal Workers Union AFL-CIO (APWU) on a tentative four-and-a-half year contract.

USPS officials said that upon ratification by union membership-expected-in the next two months, this deal will run through May 20, 2015 and impact roughly 205,000 employees. They added that this contract will “set the stage for a more flexible and cost-effective workforce to accommodate America’s changing mailing trends,” citing how this deal will include:
-economic provisions that address critical Postal Service needs to control labor costs; and
-enhanced workforce flexibility to match workforce with workload.

The USPS also said that reasonable benefits and wages are key to help it meet its financial obligations and have a strong future.

“This is a responsible agreement that is in the best interest of our employees, our customers and the future of the Postal Service,” said Postmaster General Patrick R. Donahoe in a statement. “The contract will help lay a foundation that is fair to our employees and stakeholders.”

The USPS initially kicked off negotiations with the APWU in September 2010. The APWU is the largest of the Postal Service’s four unions and represents 205,000 employees, including clerks, mechanics, vehicle drivers, custodians and some administrative positions.

This announcement follows negotiations between the USPS and the National Rural Letter Carriers’ Association, which stalled on its November 20, 2010 expiration date and now is following its current agreement until a third-party weighs in on a new contract, according to the USPS. The NRLCA is comprised of 67,000 career employees and 48,000 non-career employees; these employees deliver mail in rural and suburban areas.

Jerry Hempstead, president of parcel consultancy Hempstead Consulting, said in a September 2010 interview USPS has many challenges when it comes to getting relief from its rank and file union members.

“USPS has more employees than it has work at the moment, and management has a contract…but you really don’t hear about layoffs at the USPS,” he said. “You hear more about voluntary and early retirement. There is not much the USPS can do short of making sure overtime is in check and not replacing anybody who resigns or retires to right-size the business. But considering their numbers they have done a yeoman’s job of bringing down man-hours to coincide with the decline in business.”

Hempstead added that if the USPS can get some relief from the unions in terms of the way business is managed to better align staff hours to the amount of work coming through, it would be a great win for USPS management.

Following an $8.5 billion loss in fiscal year 2010, the United States Postal Service (USPS) began the new fiscal year with a $329 million loss in the first quarter.

This is a deeper loss than the $297 loss incurred a year ago, but USPS officials said that excluding the cost of prefunding future retiree healthcare benefits and noncash adjustments to the workers’ compensation liability, the Postal Service would have had a net income of $226 million for the first quarter.

During the height of the recession, the USPS cited things like economic pressures and migration to electronic media having a significant adverse impact on mail volumes and operating revenues. To counter this, the USPS implemented various measures to eliminate work hours and drive productivity improvement, but still was unable to get into the black.

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About the Author

Jeff Berman
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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