Had the U.S. Postal Service incrementally made improvements over the years, Postmaster General Louis DeJoy says, Americans wouldn’t know who runs their mail agency. And DeJoy, the controversial leader of the mail service, wouldn’t be making “uncomfortable” changes at the Postal Service to make it fit for evolving consumer habits.
But when DeJoy, a former supply-chain logistics executive and conservative political donor, took over the Postal Service in June 2020, the agency was in dire shape. The coronavirus pandemic was on the verge of sidelining much of its workforce. Its complex transportation network was misaligned, a cardinal sin in DeJoy’s logistics world. The postal chief’s changes to fix what he saw as fundamental flaws cascaded into a mail-delay crisis before the 2020 presidential election that made DeJoy a household name.
“And despite all this stuff, I never really feel any stress about it,” DeJoy told The Washington Post in an interview.
“We can be demonstratively the best-run agency in the United States government,” he added. “Why? Because we do transactional things that are measurable, that are definable and we provide a service that is impactful.”
President Joe Biden recently signed legislation into law to unburden the mail agency of years’ worth of financial constraints. Its delayed service has begun to rebound. The Postal Service became a major part of Biden’s pandemic response, shipping more than 320 million rapid coronavirus test kits to American households since late January.
And DeJoy has his first real opening to attempt to make the Postal Service more competitive with private-sector shippers FedEx, UPS and Amazon – companies that have used the pandemic to build out their own networks and decrease their reliance on the mail agency. (Amazon founder Jeff Bezos owns The Post.)
“All I want to do is run the place better,” DeJoy said. “I’m not out there making this kind of policy or that policy. I want my trucks to run on time. I want my trucks to be full. I want my carriers to show up at the same address every day. I want my people to be safe and to like being here.”
But top Biden administration priorities on climate change and voting rights are running into DeJoy’s agency transformation – presenting fresh challenges in Congress, the White House and post offices across the country.
DeJoy sat down with The Post to discuss the state of the Postal Service and questions about its future. The conversation has been edited for clarity and brevity.
Q: When you arrived at the Postal Service, what did it need in terms of logistics?
A: What this place needs from a logistics standpoint has not been solved yet. We have 500 different plants and 19,000 different delivery units, and that doesn’t talk about the 31,000 retail centers. How do we optimize all that for different types of business? We got a lot of work there.
What I did do was identify that we’re in a crisis and said we need to have a plan to get out of this. We were losing $10 billion a year, losing market share all over the place, burning out people, running empty trucks. Our plants are terrible. And there was no plan. It was metastasizing. And there was this false reality that existed that there was some way you could solve this thing just the way it existed.
Q: Was that difficult to do – to start telling people that you thought the Postal Service was in a much worse place than many were willing to admit?
A: From my standpoint, there was a lot of self-interest. In many ways in my head, I just called B.S. on it and looked right down the line what needed to be done. And management did have a role. I think management could have done more. The Postal Regulatory Commission had a role in taking years to find out that diminishing mail volume matters and letting us adjust our prices.
Congress had a role from unfunded mandates to letting the place run with an empty board of governors. All these things were metastasizing within the organization, and when I got here, there was no plan. The place, it just lacked definition everywhere. And that was what my 10-year transformation plan was about. There were three tenets. Number one, we’re going to deliver six days a week to 161 million addresses. I wanted to get that off the table, cutting delivery days. I saw delivering six days a week as a ticket to the future – one way out.
Number two, we have to cover our cost. It’s a good thing. It means that you can’t do all things at all cost. And the fact of the matter is when we’re losing money the way we are, we are satisfying unreasonable expectations.
Number three, make the place believe that we’re a going concern, that we will meet our financial obligations when they come due, that we’re going to be here 10 years from now.
Q: Was there doubt that the Postal Service would exist 10 years from now?
A: I came in, and they said, “We’re going to run out of cash and we’re going to lose $20 billion in the next year.” The Government Accountability Office has put us on the high risk list for 10 years. The only way we survived was not paying employee health-care benefits. I was the person to take it seriously. Now you will read, “The Treasury Department will never let this happen.” OK. I don’t know. Maybe? What kind of carnage are we going to have here at the Postal Service and for the nation by testing that model to see if Treasury is going to jump in? I took it seriously.
Q: Let’s talk about voting by mail. Will the Postal Service commit to using the same “extraordinary measures” – dedicated ballot-expediting procedures – in the 2022 midterm elections that it used in elections in 2020 and in 2021?
A: The answer is yes. It has never been in question. It’s like you tie your shoes when you walk out the door and then you see a judge who says, “You must tie your shoes in the future.” It was kind of a ridiculous accusation. And listen, that’s not me. That was the organization that was here before. Now I may have aligned the network, had more meetings, done a little more stuff. And when you look at all the changes I’m making, I’m one person. I didn’t bring in outside consultants. This is internal postal genetics. So we always use the extraordinary measures. We don’t need a judge to tell us, we don’t need a nonprofit to tell us. We use our best efforts to make sure every ballot that we get our hands on will get delivered. We have done it. It shows in the results. So we’ll continue to do that.
Q: The Biden budget wants to give the Postal Service $5 billion for mail-in voting to make ballots postage free, reduce certain election-related costs and more. Do you want that money? Do you need that money?
A: We are interested in, to the extent that the states can standardize and use first-class mail and so on and so forth, I think it creates more reliability. We’re the most consistent thing in voting by mail. Everybody else changes rules every year. We’ve been pretty stable in that regard. But we don’t advocate for anything in that regard. This is the nation’s policy.
Q:Let’s move to the Postal Service’s new fleet of delivery trucks. You recently ordered 50,000 trucks, 10,000 of them electric.
A: 10,019 electric.
Q: Yes, 10,019. Where do you see that headed in terms of more electric trucks? What’s the trajectory on that?
A: When I got here, the truck procurement had been in a pile since 2015. We have people that can’t put their trucks in reverse because they’re in such bad shape. I needed to buy trucks. What we knew about electric vehicles was what an engineer would know about electric when I got here: the different type of transmission, this and that. You have a lot of information on infrastructure and so on, and we needed to move. And we almost got $6 billion, $7 billion from Congress for electric trucks in the Build Back Better Act. We were this close!
From my standpoint, my mission is delivering mail and packages. The policy of electrifying the fleet of the nation is a mission that I will support. But I would be negligent to spend all my money on doing that. So we didn’t have the money, we didn’t have the knowledge. We got 10,019 electric vehicles rather than 5,000 because we’re in a better financial position.
I do think electrification of the vehicles is good. I’m a supporter. At this particular point in time, when I went to make the order, there’s 10,019 specific routes that I know are a slam dunk that we will use them and it will work. And that is how I make decisions as we move forward. And I’m not buying 180,000. I’m buying 50,000. When I go to buy the next amount, we will reevaluate.
Q: The Postal Service’s cash balance right now is somewhere between $20 billion and $24 billion. There will be people who will say you have enough money to buy electric vehicles already. Why are they mistaken?
A: Number one, whether I run out of cash tomorrow or I run out of cash three years from now –
Q: You’ve said this before. It’s a matter of if you pay your bills.
A: Yes. Number two, I have a lot of other needs. I got 500 plants I need to address. I have 30-year-old IT. I have to spend a couple billion dollars to get my IT relevant. I have to spend a few billion dollars, at least, to get my plants relevant. Look, I made a decision on this batch. When it’s ready for the next batch, I will evaluate. We’re driving a lot of change and transformation, so I should expect that facts should be different for me two years from now than they are today. They’re different for me from 18 months ago when I got here.
If fuel prices stay the way they are, if the technology evolves. We’re still putting 10,000 electric trucks into service pretty quickly. I’m saying, we’re buying 50,000 trucks and 10,019 of them are electric. And we’ve done it, right?
The next time when we do our next buy, we’ll evaluate it under the circumstances of where we are in our transformation. We are a puppy as an organization right now. We don’t know what we’re going to be when we grow up. We have a direction, but that’s it. I want to be able to be flexible. I appreciate everybody’s interest in that, and I think it’s a good interest. But that is not my total responsibility.
Q: So you see that electrification as social policy?
A: No, I don’t see it as social policy. I see it as a national policy. And I mean, we have many green initiatives, but we also have lots of initiatives and only so-deep pockets. We have different needs for the vehicles. Even these 10,000, they didn’t show a cost benefit in the 10,000 that we bought on the routes that we have. We’re hoping long term that the economics continue to play out and in our favor in that regard.
Q: There will be people who will read what you just said and say, “That is complete nonsense.”
A: Because of the cash that we have?
Q: Because of the cash. Because your competitors like Amazon, FedEx and UPS are buying EVs not because of the environment, but because they see the business sense in it. There are people who want the Postal Service to buy electric vehicles because of environmental concerns and others because they think EVs can save the agency money.
A: The service requirements that we have with these vehicles are far different than FedEx or all the rest. And the economics – people may not believe them – but the economics that my team has come up with demonstrate that at this particular point in time, these particular routes are beneficial and these particular routes are not for our application. And that is the math that we are going with.
And we have other needs for our capital. If I was buying 180,000 trucks right now, OK, I’d say everybody has a better discussion with me. I’m buying 50,000. Congress is still talking to us about other things. I don’t have to make big statements about this, because we’re making big statements about a lot of things.
Q: Let’s move on to the more than 320 million at-home coronavirus test kits the Postal Service has shipped to Americans on behalf of the White House. Tell me about how that materialized.
A: We had a call from the White House, and the Department of Health and Human Services was partnering with them. We get lots of calls for lots of things, and I often felt that when we get involved with things, it’s other agencies’ glory and our cost. That’s been my basic position. But this was starting to heat up in terms of being a real requirement. The team was looking at outsourcing it, and I sat down and listened to some of the plans. People were going to get 10 million square feet of buildings and 10,000 people, and I thought, this is not going to work. So I jumped in on the calls about two or three days before Christmas. I put our team together really quickly, and the day after Christmas and everybody worked nonstop.
Forty million orders came in. We have an inventory control system that we put in all the plants. Every plant was tied to Zip codes that it would deliver to. That’s why the delivery was so quick; 60% of them got delivered within a day.
When I got my tests, by the time you all had inventory, it was there the next day.
Right now we’re shipping a couple hundred thousand a day as we get the orders. It shows you the power of the organization. I told everybody, “Don’t treat this like mail. This is inventory. This is deliberate.” This is everything that I did in my previous career, and it was just phenomenal how – you know, the first days are always rough when we were making the change, but then once it clicks, the talent and the commitment, it was just fascinating to see. We were shipping 3 million orders a day, like within two weeks.