Read the postmaster general’s opening statement.
Read Postmaster General Louis DeJoy’s prepared opening remarks before the GOP-led Senate Homeland Security and Governmental Affairs Committee below. Follow our live coverage of today’s hearing. Good Morning Chairman Johnson, Ranking Member Peters, and Members of the Committee. Thank you for calling this hearing to discuss the important work of the United States Postal Service. I am proud to represent the more than 630,000 hard-working and dedicated men and women of the Postal Service, who have proven, now more than ever, the importance of the Postal Service in the daily lives of all Americans. It is an incredible honor to serve the public and this organization as Postmaster General. I assumed the role of Postmaster General just over 60 days ago with the goal of preserving and strengthening this great American institution. The Postal Service was established by Congress to fulfill a public service mission of providing prompt, reliable, and universal postal services to the American people, in an efficient and financially self-sustaining fashion. The Postal Service’s ability to fulfill that mission in the coming years is fundamentally at risk, and changes must be made to ensure our long-term sustainability for the years and decades ahead. The business model of the Postal Service—as established by law—requires us to cover our costs through our own efforts, and I view it as my personal obligation to put the organization in a position to fulfill that mandate. 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 Postal Service. But it does require significant effort by the Postal Service to change. Since the Governors announced my selection as Postmaster General in May, I have been fully immersed in understanding and evaluating all aspects of the postal organization and business model, to understand the Postal Service and the reasons for our current financial condition. I have been working closely with postal leaders to learn every core area of our business. We have assessed previous plans, as well as research and analysis about our products and services and the competitive marketplace. We have evaluated our operational practices and the many ways we deliver value for our customers, as well as the drivers of our troubling financial condition. We have looked to find the good in the organization, which we will preserve and strengthen, and we have also tried to identify the items that are obstacles to our success, and to chart a course to surmount those obstacles. I am an optimist by nature. For that reason, I am enthusiastic and energized about the prospects for the future of the Postal Service and our untapped promise. I have been extremely impressed by the dedication of the Postal Service workforce and their commitment to the public service that we provide the American people, and I am excited about the fantastic competencies of this organization. I believe that there are tremendous opportunities available to us if we are willing to grasp those opportunities, and to take the transformative steps necessary to turn our business around and become financially healthy, while remaining a vital part of the nation’s critical infrastructure. Some may ask, why does the Postal Service need to transform? To that question, I say that while I am optimistic about the future of the Postal Service, I am also a realist, and am keenly aware of the magnitude of the financial challenges we face. Our financial position is dire, stemming from substantial declines in mail volume, a statutorily-imposed business model that is broken, huge legacy retiree healthcare and pension liabilities, and a management strategy that has not adequately addressed these issues. As a result, the Postal Service has experienced over a decade of financial losses, with substantial net losses every year since 2007. In FY 2019, net losses approached $9 billion and we are closing in on $11 billion in losses for 2020. Currently, our liabilities exceed our assets by approximately $135 billion. Without dramatic change, there is simply no end in sight, and we face an impending liquidity crisis that threatens our ability to deliver on our mission to the American public. At the same time, there is a critical need to make capital investments to ensure effective and efficient operations, and meet the needs of the American people. Our financial situation has forced us to defer capital investments over the past decade to preserve liquidity, which is not a sustainable strategy for success. Most vitally, we need to invest in new delivery vehicles so that our letter carriers can safely serve the American people and we can participate in the growth of the new economy. Changing this state of affairs and positioning the Postal Service for long-term success and sustainability requires fundamental changes. It requires that we stop simply talking about the ways to address the Postal Service’s financial condition, and instead start actually addressing them. It requires that the Postal Service not be prevented from taking the steps necessary to transform our organization to meet the challenges that we face. It requires a recognition that in order to achieve the mission laid out by our statute —to provide high-quality universal postal services in an efficient and self-sustaining fashion—the Postal Service must continually adapt and adjust our operations to a constantly changing world. We simply cannot be successful if we are subject to political or regulatory requirements that force us to remain static in a world that is incredibly dynamic. I am not kidding myself, so I fully understand that these steps will not be easy, which is likely one reason why they have not been taken before. But they are necessary, and I am committed to doing the hard work. I certainly recognize that not everyone will agree with the ideas I have concerning how to return the Postal Service to a financially sustainable path. These solutions are based upon my 30 years of commercial experience in the logistics business and the listening, collaboration, and intensive reviews I’ve conducted with members of our Postal Service team across the organization. My vision is of a Postal Service that provides our essential public service in an efficient and effective manner and that can adapt to the evolving needs of the American public in a self-sustaining way, which is consistent with our statutory mandate as established by Congress. I also want to make certain things clear. One criticism that I have heard is that some believe that I treat the Postal Service as a private sector business, rather than a government service. I accepted the job of Postmaster General fully committed to the role of the Postal Service as an integral part of the United States Government, providing all Americans with universal and open access to our unrivalled processing and delivery network, as reflected in the Mission Statement that the Board adopted on April 1,2020. I fully embrace six-day delivery of mail and packages as one of this organization’s greatest strengths. I also plan to invest in tools and equipment for our letter carriers, and to enhance the stability of our non-career workforce, to continue to provide the nation’s most trusted service. At the same time, I recognize that in 1970, Congress created an independent Postal Service designed to operate more like a business, with substantial autonomy over its operations and the freedom to make postal decisions outside of the direct political control of Congress or the President. Congress has therefore recognized that achieving our public service mission and acting in a business-like manner are not mutually exclusive. Rather, making decisions based on the exercise of business judgment regarding the best way to provide service to the American people is fundamentally necessary if there is any hope for us to fulfill the Postal Service’s statutory mission. I am also fully committed to preserving and protecting the Postal Service’s proud tradition of serving the American public in a nonpartisan fashion, and I embrace the concept of public service as a public trust. I intend to uphold the trust that has been placed in me by the Governors, and in that regard, I have and will continue to abide fully with all of my ethical obligations, despite assertions to the contrary. I have worked closely with ethics officials and have followed their guidance, and will continue to do so. I took this job to give back to my country and to hopefully do some good by putting the Postal Service back on a financially sustainable path. I recognize that our service performance has come into question recently. We take these concerns seriously and are focused on stabilizing service to ensure we meet our commitment to the American public. We deliver to 160 million residences and businesses 6 days per week, and on a normal day the Postal Service shows up and delivers 99.94 percent of the time. Unprecedented conditions over the last six months, however, have contributed to service instability in certain areas of the country that have escalated. Since March 2020, the Postal Service has experienced mail delivery challenges due to the COVID-19 global pandemic. The impacts of the pandemic have had broad reaching impacts on all aspect our operations, with a limited supply of commercial air trips to carry our volume, decreased employee availability as employees deal will health, home and community impacts, and significant changes in mail and package volumes. However, our overall ability to service our required deliveries during these difficult times still remains above 99.88 percent. In addition, improvements we have made in our transportation network have also revealed the need to realign some of our other processes, which have temporarily impacted mail and package service performance. We are acting to address those issues, and have seen immediate improvements, and we will continue to make necessary corrections. Despite these shortfalls, the American public’s support of our employees has been overwhelmingly positive and we continue to work diligently with hiring and reallocating resources to ensure we deliver at expected levels. Service, like many things, is local. And there are several cities and communities that have been hard hit by the pandemic. These same cities and regions are also some of the most complex delivery operations we manage. All of that, combined with employee availability issues and difficulties in hiring additional resources, have resulted in more significant delivery service disruptions than reflected in the national average. The entire organization is working collectively to restore consistent delivery service. We are mobilizing all available resources and managing these offices at a national level. Overcoming difficult times and providing a sense of normalcy for the American public is just one critical attribute of this organization’s resiliency that has contributed to our legacy for the past 240 years. While our resiliency has been tested, it has not been broken. You have my commitment, and that of the entire organization, that we will stabilize operations and restore the nation’s confidence and trust in the Postal Service. The causes of the Postal Service’s dire financial condition are well-understood, and the only way that they can be solved is through significant and fundamental reforms to our current business model. This requires action from Congress, the Postal Regulatory Commission (Commission), and the Postal Service. As the Postal Service has said for years, Congress and the Commission have long delayed much needed legislative and regulatory reforms which would have helped to address the situation. Congress must enact reform legislation that addresses our unaffordable retirement payments. Most importantly, Congress must allow the Postal Service to integrate our retiree health benefits program with Medicare, which is a common-sense best practice followed by all businesses who still offer retiree health care.
