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USPS pauses downgrade of South Dakota postal operations

The original Sioux Falls plan, finalized April 30 by Postmaster General Louis DeJoy, involved moving non-local postal operations in South Dakota’s largest city to a facility in Omaha, Nebraska.

US Postal Service pauses downgrade of South Dakota mail operations
The post office in downtown Sioux Falls, currently a processing and distribution center, would be downgraded to a local processing center as part of the United States Postal Service’s “Delivering for America” ​​restructuring plan. (Photo: Stu Whitney/South Dakota News Watch)

SIOUX FALLS, SD – The U.S. Postal Service has agreed to “pause” until at least next year a controversial plan to downgrade post office operations in Sioux Falls and Huron to local processing centers, setting off similar implementation delays in other states to walk.

The original Sioux Falls plan, finalized April 30 by Postmaster General Louis DeJoy, involved moving non-local postal operations in South Dakota’s largest city to a facility in Omaha, Nebraska.

The reorganization raised concerns about slower mail delivery in rural communities because letters and packages previously processed and shipped from Sioux Falls will be routed through Omaha, 160 miles away.

Similar concerns were raised in February, when the USPS made a decision to downgrade its Huron facility to a local processing center, moving all non-local processing to Fargo, North Dakota.

Sen. Mike Rounds of South Dakota joined 26 senators in sending a bipartisan letter to DeJoy on May 8 urging a pause on implementing the plans, adding that the USPS would not make “irrevocable changes to its processing and supply network”.

DeJoy responded with a May 9 letter to Michigan Sen. Gary Peters, the Democratic chairman of the Homeland Security and Government Affairs Committee. DeJoy agreed to “pause the movement of processing activities associated with postal processing facility assessments” until at least January 1, 2025.

“Even then,” DeJoy wrote to Peters, “we will not advance these efforts without notifying you of our plans to do so, and then only at a moderate pace of implementation.”

Rounds announced the move on his Twitter page on Monday, saying that “this is a step in the right direction to protect rural postal services in our state.”

The interior of the US Postal Service offices in Sioux Falls, South Dakota.
In an April 30 statement, the USPS said the Sioux Falls facility would remain open as a local processing center and would receive “up to $12.75 million in upgrades,” including upgraded sorting equipment, new lighting and renovated bathrooms and cafeterias. (Photo: Stu Whitney/South Dakota News Watch)

The downtown Sioux Falls facility is currently a processing and distribution center. The USPS plan called for remaining open as a local processing center and receiving “up to $12.75 million in upgrades,” including improved sorting equipment, new lighting and renovated bathrooms and break areas.

In his letter, DeJoy made it clear that as part of the pause, “the positive investments in the facilities will also not commence, just as the annual cost savings associated with these mail moves will not be realized while we pause.”

Jobs affected in Sioux Falls

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

Mark Inglett, a USPS spokesman based in Kansas City, told News Watch when the plan was finalized that there was no set timeline for implementation.

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

USPS delivery statistics from South Dakota/Nebraska/Iowa County

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

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

Postmaster General takes charge of USPS changes

The plan’s intent was to “upgrade and improve the USPS’s processing, transportation and delivery networks” in light of changing postal habits and increased competition from parcel shipping companies.

In November 2023, the USPS announced that it lost $6.5 billion in the most recent fiscal year, despite its own projections that it would break even.

DeJoy cited inflation as a root cause of the poor performance and pointed to the ongoing restructuring as a positive step to turn things around.

“We are only in the early stages of one of the country’s largest organizational transformations,” he said at the time.

The USPS proposed an across-the-board shipping fee increase of nearly 8% on April 9, pending approval by a regulatory committee. Under the proposal, Forever stamps would cost 73 cents instead of 68 cents.

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

Democratic Senator Jon Ossoff of Georgia cited statistics showing an on-time delivery rate of 36% and told DeJoy: “You have weeks, not months, to fix this. And if you don’t solve it, I don’t think you’re qualified for this job.”

This story was produced by South Dakota News Watch, an independent, nonprofit news organization. Read more in-depth stories at sdnewswatch.org and sign up for an email every few days to receive stories as soon as they’re published. Contact Stu Whitney at [email protected].