WASHINGTON, DC – Today, during a Senate Homeland Security and Governmental Affairs Committee hearing to consider pending nominations of Derek Kan and Daniel Tangherlini to serve as Governors of the United States Postal Service, the nominees voiced their support for Ranking Member Rob Portman’s (R-OH) bipartisan Postal Service Reform Act that, when coupled with Postmaster General Louis DeJoy’s Ten Year Plan, will set the United States Postal Service on a more sustainable financial footing and support long-term reliable service across the country. The bill – which has now passed both the House and Senate with strong bipartisan support – will make the first major reforms to the Postal Service in more than 15 years.
A transcript of Portman’s questioning can be found below and a video can be found here.
Portman: “Thank you Mr. Chairman, I wasn’t going to start here, but I will, with regard to the vehicles. Just last week they announced they plan to order 50,000 new delivery vehicles, including 10,000 electric vehicles. The Chairman is right, some of these vehicles are 30 years old. This procurement actually started several years ago. It’s taken forever. So I think it’s important to move forward. You both served on the boards of transportation organizations, I noted. And you’ve had to manage major capital expenses like this. What are your thoughts about this purchase? I will give you mine, for what it’s worth. I think they ought to be careful not to go down a track, Mr. Kan, you just implied this, or at least I inferred from what you said, where we’re buying expensive new technology that’s not proven out or the infrastructure is not in place. I mean, this is your fiduciary responsibility, should you be confirmed, to be sure the taxpayer dollar is being used wisely. So are there any pitfalls you’d advise the Postal Service to avoid in a major purchase like this? Maybe start with you, Mr. Kan.”
The Honorable Derek Kan, Nominee to be a Governor, U.S. Postal Service: “Thank you, Ranking Member Portman. Absolutely. Postal Service has like a quarter-million vehicles today, and all those vehicles rely upon an infrastructure that currently exists, which is gas and diesel fuel vehicles. One of the main pitfalls is ensuring not only is that what you are buying is adequate to be produced, but also the infrastructure around it is sufficient. So if we buy 10,000 electric vehicles and we deploy them to Montana or to some rural parts of the country, there may not be the electrification of the grid to support these vehicles. And so I think a major pitfall is ensuring that all of the components needed for a procurement are in place. We’ve run into this problem many times where you may procure something, but you may not have procured the transportation of the thing you’re buying. And so similarly, with electric vehicles, ensuring that we have the infrastructure to support 10,000 or in this case, potentially even more electric vehicles is going to be, I think, a key pitfall that we need to be mindful of.”
Portman: “Mr. Tangherlini?”
The Honorable Daniel Tangherlini, Nominee to be a Governor, U.S. Postal Service: “I just would like to echo Mr. Kan’s comments and say that the biggest pitfall in any long-standing procurement is rushing too fast ahead and getting ahead of the capability of the organization to absorb the technology. So what I would like to understand is how has the Postal Service planned for the accommodation of a change in this technology? We had similar experiences with natural gas buses and hybrid electric buses. And so the actual cost wasn’t the vehicles itself, but the infrastructure and then the need to make sure that the service ultimately that you’re responsible for is being delivered because at its core, it doesn’t matter what the vehicle is as long as the mail is getting to people’s residences. The question then is the cost structure. Have they thought through the implications of a long-term purchase, and how do they accommodate the eventual technology shift? I think these are all questions that a good active board is challenging the management to think through and respond to.”
Portman: “Well, I appreciate those responses. I know there’s some green advocates who have said it’s got to be all-electric and let’s go for it. And I’m the owner of my fourth hybrid vehicle. I would have gotten an electric if it was available. The F-150 only comes in hybrid right now, soon electric. But I just think your job will be to ensure that the money is properly spent. And so looking into the future is fine. But looking too far into the future means that, as Mr. Kan has indicated, and you have too indirectly, Mr. Tangherlini, you could end up with a huge expense either on the lack of infrastructure or on the maintenance and service side of this. So just being smart about it, I think it makes sense and not being committed to one path or the other, but rather being sure that it’s the right mix.
“On the Postal Service election reforms during the 2020 election, there were lots of problems involving election mail. The Post Office chose to reduce processing capacity close to election deadlines, we were told. The USPS sent 46 letters out to 46 different states, including Ohio, by the way, saying that the state election rules were incongruous with the Postal Service delivery standards, meaning that ballots requested near the deadline under the state law would not be returned in mail in time to be counted. I mean, that’s a big problem. People vote and they expect their vote to count. So how can the Postal Service improve its role in federal elections? How can states improve their roles? What can we do in terms of a reform effort here in Congress? Mr. Tangherlini why don’t you start on this one?”
Mr. Tangherlini: “Thank you very much, Senator. I think that the Postal Service should have a stronger connection with the states if the states are going to rely on its service for this vital Democratic process. And I don’t quite know yet enough about what happened then or how the Postal Service is thinking about it now, but I do commit that a repeat of those outcomes of that concern would be something I would want to very much avoid if I get to be a governor.”
Portman: “Mr. Kan?”
Mr. Kan: “Thank you, Ranking Member Portman. I just want to build upon Dan’s answer. I think that the Postal Service statutory requirements are clear, that there’s a basic and fundamental service that needs to be fulfilled here, and I’d want to better understand the specific details and the current relationships with states to ensure that that basic and fundamental services is fulfilled. It seems like what happened in 2020 is unacceptable. However, I don’t have all access to all the facts at this point, but I’d really want to understand and understand specific decisions of what led us here and making sure that that does not occur in future elections.”
Portman: “We are working on some legislative ideas here and we may be in touch with you all should you be confirmed about that. But I think it’s important that both of us be frank with what their capabilities are but also improve those capabilities going into an election season.
“The Postmaster General, some groups have called on President Biden to nominate governors who commit to removing Postmaster General DeJoy. Both of you, have either of you made any commitment regarding whether you would support the removal of the Postmaster General or not, if you are confirmed? Mr. Kan?”
Mr. Kan: “No, nobody has asked either.”
Portman: “Mr. Tangherlini?”
Mr. Tangherlini: “No, sir.”
Portman: “Has anybody asked you that?”
Mr. Tangherlini: “No. No one has.”
Portman: “No one’s asked you to support his removal?”
Mr. Tangherlini: “No one has asked me to support his removal.”
Portman: “Okay. With regard to the Postal Service reforms, the path to financial sustainability was a huge part of what we were trying to do and it goes along with an internal reform effort. In other words, as I said earlier, our part was just to provide some breathing room for necessary reforms that have to be made for this to be sustainable over time. What do you see as the most important actions the Postal Service can take to generate more efficiencies, Mr. Kan?”
Mr. Kan: “I think the Ten Year Plan is a good start. There are a number of parts of the Ten Year Plan. One is maintaining strong customer service but also trying to improve the infrastructure on the network and leverage the network to generate more revenue. I think those are both sensible places to start. The Ten Year Plan, if faithfully implemented, will likely result in higher margin and more opportunities for the US Postal Service to have long term financial liability.”
Portman: “Mr. Tangherlini?”
Mr. Tangherlini: “Like Mr. Kan, I’m very interested in the actual details of the Ten Year Plan. I’ve had a chance to review some of the high level materials. I think ideas about service, about leveraging retail, about extending product offerings. I’m very interested in something I didn’t see in the Ten Year Plan which is the potential value of Postal Service real estate and whether there’s some opportunities for finding efficiency there. I think the conversation about fleet, dramatically improving the quality and the capability of that fleet and then the work that this Committee did on the Postal Service reform legislation really does set the stage for opportunities to dramatically improve the effectiveness and efficiency of the Postal Service.”
Portman: “Thank you, Mr. Tangherlini. Thank you both. I appreciate it.”
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