The U.S. Postal Service in March will take over operations at a regional mail distribution center in Denver and terminate its contract with freight transportation company Alan Ritchey Inc., resulting in layoffs for 729 employees, as part of an ongoing network reorganization.
Valley View, Texas-based Alan Ritchey Inc., which has hauled mail for the U.S. Postal Service for decades, notified Colorado authorities on Wednesday that it will discharge all its workers at the Denver Regional Transfer Hub at the end of February after being notified Dec. 29 that its services are no longer needed.
The company has 87 power units, according to the U.S. Department of Transportation’s motor carrier database.
In September 2024, the Postal Service began to streamline its network by reducing the number of surface transfer facilities and creating larger hubs with the goal of decreasing the number of trips needed to move mail across the country and save money. Combined volume from origin locations is sorted and dispatched to destination processing facilities. The Postal Service currently has at least 18 regional transfer hubs, with plans to activate more.
The mail agency said at the time that work handled at regional transfer hubs would be brought in-house by the end of 2025, but some facilities continued under contractors. The Denver hub is the only facility operated entirely by a private company.
Alan Ritchey’s contract was modified to meet the revised work requirements and has been continuously extended over the past year. The sudden termination notice was unexpected because USPS officials had previously indicated they would need several months to modify the Denver hub and transition it to Postal employees, CEO Robby Ritchey wrote in a job-notification letter to the Colorado Department of Labor and Employment, as required by law.
Poor security
An audit by the Postal Service’s inspector general last summer identified deficiencies at the Denver hub that put mail at risk of theft and unauthorized handling. The agency watchdog said facility managers had found multiple tracking tags hidden on the workroom floor, inside mail transport equipment, and in the inbound dock area since January 2025 and they were concerned that contract employees were opening the sacks to pilfer certain medications. The mail repair station was not always staffed overnight and on weekends, which coincided with the disappearance of many packages.
Auditors also pointed to high levels of damaged mail, which managers suspected was caused by contractor staff rifling through the contents rather than by mail processing machines, and insufficient security controls over registered mail.
“The lack of management oversight and Postal Service staffing at the Denver RTH has created significant vulnerabilities in mail security and handling. The Postal Service did not implement adequate controls to prevent theft and unauthorized access, which could lead to contractors tampering with the mail,” the audit stated. “A contributing factor was the contract’s statement of work, which did not outline specific requirements for handling registered mail, leaving critical security gaps unaddressed. Additionally, Postal Service officials assigned to the Denver RTH did not provide necessary oversight, opening the door for misconduct by the contracted employees. The absence of functional security measures, including non-operational cameras until April 2025, facilitated unchecked handling and allowed for the persistence of potential mail-related misconduct.”
An investigation by the Office of Inspector General led to the termination of three contract employees at the Denver facility for theft or knowledge of the theft.
Since the audit, the Postal Service has installed a secure cage for processing registered mail, installed additional security cameras and replaced the contractor’s plant manager. It also updated its staffing plan to ensure coverage during all work shifts, according to the report.
Denver TV station KDVR previously reported on the Alan Ritchey exit from the Denver hub.
Click here for more FreightWaves stories by Eric Kulisch.
Sign up for the biweekly PostalMag newsletter The Delivery here.
RECOMMENDED READING:
Air cargo contractor reimburses Postal Service for fraudulent billing
Sky Lease Cargo settles fraud case over Postal Service contract for $1M
