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USPS downgrades postal operations in South Dakota

SIOUX FALLS, SD – The U.S. Postal Service has finalized its plan to downgrade the downtown Sioux Falls post office to a local processing center and move non-local postal operations to a facility in Omaha, Nebraska.

The restructuring, first implemented in January, has raised concerns about slower mail delivery in rural communities as letters and packages formerly processed and sent from Sioux Falls are routed through Omaha, 160 miles away.

USPS expects the change to impact 35 non-managerial positions and three management positions in Sioux Falls. Those jobs are protected by union contracts, but employees will likely have to move to other facilities, said Todd West, president of the South Dakota chapter of the American Postal Workers Union.

In February, the USPS made the decision to downgrade its Huron facility to a local processing center and move all non-local processing to Fargo, North Dakota.

“These moves will impact service,” West, a Watertown resident, told News Watch. “If you want to send something and you know it will take three or four days to get to the post office, what are you going to do? They go to FedEx or UPS or some other carrier.”

In an April 30 statement, the USPS said the Sioux Falls facility will remain open as a local processing center and will receive “up to $12.75 million in upgrades,” including upgraded sorting equipment, new lighting, as well as renovated ones Bathrooms and break rooms. (Photo: Stu Whitney / South Dakota News Watch)

The facility in downtown Sioux Falls is currently a processing and distribution center. In an April 30 statement, the USPS said the facility would remain open as a local processing center and receive “up to $12.75 million in upgrades,” including improved sorting equipment, new lighting and renovated bathrooms and break rooms .

As for the restructuring, the statement said, “The business case supports the transfer of outbound mail processing operations to the (Omaha facility).”

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“It shows progress in our quality journey and using the same measurement with today’s data would result in higher ratings.”

Mark Inglett, a USPS spokesman based in Kansas City, told News Watch that there is no current timeline for implementing the changes.

Delivery times for first-class mail are already declining in South Dakota, Iowa and Nebraska, according to USPS data. The on-time rate for fiscal year 2024 is 81.4%, compared to 86.8% at the same time last year.

South Dakota Rep. Dusty Johnson told News Watch in a statement that the restructuring in Sioux Falls and Huron could impact delivery service and uproot employees.

“While the purpose of restructuring the Postal Service nationwide is to increase efficiency, in a state with a large rural population like South Dakota, the change may result in a reduction in speed and efficiency,” Johnson said. “South Dakota residents rely on timely service to get their news and pay their bills. Not to mention the dozens of jobs that are moving out of state, forcing families to move or find another job.”

The restructuring is part of a $40 billion “Delivering for America” investment strategy led by Postmaster General Louis DeJoy, who was appointed by former President Donald Trump in June 2020.

This continues a trend from 2012, when the USPS closed processing centers in Aberdeen, Mobridge and Pierre, leaving South Dakota with only facilities in Sioux Falls, Rapid City and Huron.

USPS delivery statistics from the South Dakota/Nebraska/Iowa District

Postmaster General responds to USPS changes

The plan's intent is to “modernize and improve the USPS's processing, transportation, and delivery networks in the face of changing postal habits and increasing competition from package shipping companies.”

In November 2023, the USPS announced that it had incurred losses of $6.5 billion in its most recent fiscal year, even though it itself expected it would break even.

DeJoy cited inflation as the main cause of the poor performance and pointed to the ongoing restructuring as a positive turnaround step.

“We are only at the beginning of one of the largest organizational transformations in the country,” he said at the time.

The USPS on April 9 proposed an overall increase in postage prices of nearly 8%, pending approval by a regulatory commission. Under the proposal, Forever stamps would cost 73 cents instead of 68 cents.

DeJoy faced sharp criticism from U.S. senators at an April 14 oversight hearing that highlighted mail delivery delays caused by centralized USPS operations in the Atlanta area.

Citing statistics showing a 36% on-time rate, Democratic Sen. Jon Ossoff of Georgia told DeJoy, “You have weeks, not months, to fix the problem.” And if you don't fix the problem, you agree with me “Not suitable for this job.”

“Don’t change service standards”

The Postmaster General can only be removed from office by the USPS Board of Governors, whose chairman has historically shown support for the Delivering for America strategy.

Under the proposed Sioux Falls plan, mail and packages destined for outside the immediate Sioux Falls area would be routed to Omaha and “combined with mail and packages from other areas going to the same locations.”

“All they will be processing in Sioux Falls is mail for zip codes 570 and 571,” West said. “So when you put a letter in the mailbox, whether it's going to Sioux Falls, Brandon or Texas, it goes to Omaha. If it turns out down there that it’s going to Sioux Falls or Brandon, it’ll come back to Sioux Falls and then they’ll process it.”

Some of the concerns about slower delivery come from groups such as newspaper publishers, which increasingly rely on mail delivery, and pharmacies, which mail prescriptions to customers.

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“It shows progress in our quality journey and using the same measurement with today’s data would result in higher ratings.”

USPS officials held a public hearing in Sioux Falls on March 13, where they assured attendees that the Sioux Falls facility would not be closed and that no career employees would be laid off.

But Inglett's statement that “we are not changing our service standards” did not calm minds, including those of South Dakota's congressional delegation.

Rep. Johnson joined Sens. John Thune and Mike Rounds in sending a letter to DeJoy on April 12 asking the USPS to “avoid downsizing or significantly restructuring mail processing operations in states like South Dakota without the special impacts on rural areas should be taken into account.”

Less than three weeks later, USPS finalized the plan.

This story was produced by South Dakota News Watch, an independent, nonprofit news organization. For more detailed stories, see sdnewswatch.org and subscribe to an email every few days to receive stories as soon as they are published. Contact Stu Whitney at: [email protected].

Anna Harden

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