Bypass mail misses mark, say rural customers

TAMAR BEN-YOSEF

November 21, 2008 at 1:51PM AKST

The U.S. Postal Service declared it is saving $1.6 a year with the new bypass mail service to Barrow and outlying villages, but customers are wondering at whose expense? And are they really saving that much?

A recent report shows the success of this service is debatable, at least from some parties’ point of view.

Bypass mail includes all non-priority fourth-class mail weighing at least 1,000 pounds. It bypasses the post office and is shipped directly from the vendor to the recipient.

The original intent behind this mode of delivery was to prevent overloading the postal facilities, offer cheaper parcel rates for large deliveries and ultimately to stimulate local economies by subsidizing carriers, allowing them to offer cheaper and more frequent flights to communities not connected to a road system.

But for some, the change in route actually means less flights and more costs.

Prior to June 2006, all bypass mail addressed to Barrow, Atqasuk, Wainwright and Point Lay was flown directly from the Fairbanks hub to Barrow and then dispersed to the villages via “Bush carriers.”  

The new method has mail arriving in Fairbanks and trucked up the Dalton Highway to the Deadhorse Airport at Prudhoe Bay, and from there it is flown out to Barrow and then to the village.

By doing so, the postal service cuts out the number of flights on large carriers and consequently, its costs. It also adds another point where mail is handled. The postal service said this new system saves them $1.6 million.

When announced, the proposal met a lot of objection from both the North Slope Borough and the airlines, claiming the change will negatively affect mail service to these remote communities and will actually end up costing the postal service even more money.

“USPS has a legitimate interest in reducing the cost burden of the bypass mail system, but it must do so in a responsible manner that complies with the language and intent of the system as set out by Congress,” said Jana Pierce, project manager at information Insights, the company that wrote the report.

This is the second report Pierce has written about the Barrow bypass changes. About six months after the change was implemented, the North Slope and the Fairbanks North Star boroughs asked Information Insights to research the impacts of this change in delivery mode. A year later the report was updated.

The reports found that while the quality of mail service has not decreased as much as originally anticipated, there have been negative impacts. Overall transit time for mail to reach Barrow and the villages has doubled, customers have a harder time predicting when their shipments will arrive, and there has been a steep rise in cases of freeze and thaw damage, spoilage, and loss from short-dated products.

In addition, weather delays have held up shipments on the Dalton Highway for as much as 36 hours, and the addition of another handling point for the mail increases its vulnerability and opportunity to become damaged or cause a bottleneck.

Problems at stores
The effects are felt most prominently at the local grocery stores.

Walter Pickett, general manager and vice president of Operations at Alaska Commercial Co., said the Barrow store has seen many problems with the new system, especially with perishable food.

“We have stopped using bypass for our perishables and we had to convert to air freight,” Pickett said. “The food was coming in spoiled or frozen and switching to air freight was the only thing we could do without taking it directly from the back door to the Dumpster.”

Pickett said the store has had to increase its inventory kept on site because bypass mail is now more erratic.

“There are long numbers of days without bypass coming in. Even with more inventories we still run out,” he said. “We didn’t have that problem before.”

North Slope Borough Mayor Edward Itta is frustrated with the situation as well.

“It’s a sad state of affairs for us. The consumer bares the costs of this change,” he said. The mayor is demanding more accountability from the postal service officials, who have been, according to the borough and Pierce, “unhelpful.”

In February, Pierce filed a Freedom of Information Act Request with the postal service in which she requested copies of carrier and transit window performance data for the bypass mail shipments to Barrow, Weinwright, Atqasuk and Point Lay for certain months in the last four years. The data would enable her to track the mail and compare transit time and delays to previous years.

“We have put in four FOIA requests but the information we got from them has been marginally useful,” Pierce said. “Information we were hoping to get is the internal monitoring and tracking data, because they don’t publish performance measures publically for this class of mail.”

The information received included only reports for mail held onsite in Barrow by Northern Air Cargo/Everts and Frontier Flying in December 2007 and January 2008.
Pierce said Lyndon Transport — the trucking company that drives the mail from Fairbanks to Deadhorse — is not required to report mail that sits in Fairbanks overnight.

In a letter from Steven Deaton, network operations specialist at the western area, Seattle branch in Anchorage, Deaton told Pierce that the reports requested are only retained for a 90-day period and the ones sent are the only ones available.

“USPS has declared the Barrow bypass change a big success, yet it has released no performance data to demonstrate that success,” Pierce said. “We need to be able to track mail in at least two locations and preferably three.”

Communication between Information Insights and Deaton has been ongoing since February but no further information has been furnished to Pierce.

Robert Stapleton, a reporter with the Alaska Journal of Commerce who has written extensively about the bypass systems in Alaska, has had a similar experience when dealing with the postal service. Stapleton turned in a FOIA request to Deaton in September and has yet to hear back. Stapleton said FOIA requests filed elsewhere usually receive a response within 10 days.

Calls placed to Deaton’s office were not returned by press time.

Parking planes
One result predicted by those opposing the change was fewer air carriers serving the North Slope. Due to the change, carriers that previously delivered mail from Fairbanks directly to Barrow now operate at a loss flying empty airplanes to Deadhorse from Fairbanks or Anchorage.

One airline — Everts Air — had to begin parking their planes in Deadhorse, a more expensive option than parking in Fairbanks.

“Bypass mail used to stage and subsidize our aircraft on a very frequent basis into barrow enabling it to continue on to the villages,” said Robert Ragar, manager of contract sales at Everts Air. “Our planes used to fly full from the road system to the slope a great distance. When switched our aircraft was staging to the slope empty which was very wasteful and expensive.

“Now our aircraft fly only directly from Deadhorse to Barrow on a less frequent basis of three times a week versus five times a week.”

Ragar said he currently is not providing competitive price service from Anchorage or Fairbanks to Barrow.

“We offered access at reasonable costs. Those costs have doubled and tripled since this modal change,” Ragar said.

So far, savings reported by the postal service have come in higher than the $1.3 million originally predicted. These unpredicted savings, according to Pierce, most likely stem from a drop in the number of customers choosing to use the bypass system.

“We have heard in interviews with restaurants and stores that they stopped using the post office and have gone to Alaska Airlines’ commodity food service. It’s more expensive but they do it because loss and damage expenses go down so much,” she said.

Pierce also said it is impossible to calculate how much of the $1.6 million is actually saved by using this method since there are many factors influencing the costs incurred by the postal service such as line haul fees and airline fleet transitions.

“What really needs to happen is for the post office to publically report its data,” Pierce said. “The post office has lost its credibility, Congress has asked repeatedly for the Post office to be more transparent. When they held hearings and explained why they would save they didn’t say it was because people will stop using bypass.”

In 2002, Congress recognized the importance of bypass mail to the sustainability of rural Alaska with the Rural Services Improvement Act.