• on Jan 24th, 2011 in Mail Processing & Transportation | 8 comments
    The Postal Service established International Service Centers (ISCs) in 1996 to become more competitive in the international mail market. ISCs distribute and dispatch both incoming and outgoing international mail. The ISC network has facilities located in five major cities: New York, Miami, Chicago, Los Angeles, and San Francisco. The Postal Service hoped that ISCs would improve service and provide the structure needed to support new products and increase revenue. However, International Mail volume has not increased as projected by the ISC marketing and sales plan. During the period FY 2007 to FY 2010, International mail volume declined by approximately 29 percent (from 858 million to 609 million mailpieces). Although the Postal Service reduced expenses by nearly $6 billion in fiscal year (FY) 2009 and by almost $789 million during the first three quarters of FY 2010, the reductions have not been sufficient to offset declines in mail volume revenue. Consequently, the Postal Service is reviewing its mail processing and retail networks to remove duplication and make them more efficient to reflect current mail volumes. In light of international mail volume declines and the Postal Service’s current financial condition, does the Postal Service still need a separate network to handle international mail? Are there other options the Postal Service could pursue to increase International mail volumes and revenue? Please share your comment(s) on how to make the ISC network more profitable, effective, efficient and economical. This topic is hosted by the OIG’s Network Processing Audit Team.
  • on Jun 18th, 2010 in Mail Processing & Transportation | 41 comments
    The U.S. Postal Service’s current fleet of more than 219,000 vehicles includes approximately 146,000 delivery vehicles, most of which are long-life vehicles (LLVs). The first LLVs were produced in 1987, and they average about 10 miles per gallon. The vehicles are right-hand drive to accommodate drivers delivering numerous mailpieces to curbside mailboxes. These iconic right-hand drive delivery trucks are nearing the end of a 24-year life cycle and are costly to maintain. In a recent audit, we noted that it cost the Postal Service about $524 million to fix the LLVs in fiscal year 2009. More than 40,000 trucks required more than $3,500 each in maintenance and another 19,000 of these required an average of $5,600 in repairs consecutively in 2008 and 2009. At this rate, for the high maintenance segment of the fleet, repairs in the next eight years will cost $342 million more than it would to buy new trucks. Considering the growing costs of maintaining this unique but aging fleet, what are your thoughts on a cost-effective, but practical replacement delivery vehicle fleet? To read the full report go to http://www.uspsoig.gov/foia_files/DA-AR-10-005.pdf.
     
    The Office of Audit Engineering & Facilities team is hosting this topic.
  • on May 10th, 2010 in Mail Processing & Transportation | 15 comments
    Recent Government Accountability Office testimony to Congress stated processing capacity for First-Class Mail exceeds processing needs by 50 percent, and analysis by industry experts indicates an additional drop of 35 billion pieces in First-Class Mail by 2020. With mail volume declining, does this provide an opportunity for the Postal Service to capture savings by adopting industry best practices in its First-Class Mail processing operations? The OIG benchmarked operations at Postal Service processing and distribution centers with commercial presort mailers to identify best practices in First-Class Mail processing. Presort mailers combine mail from multiple businesses into larger mailings that are then sorted to geographic area, and receive reduced postage prices when the mailings are tendered to the Postal Service.

    Large commercial presort mailers use comparable processing equipment and similar processing operations as the Postal Service. In fact, several of these mailers are publicly-traded companies with thousands of employees who are located in multiple geographic areas. Although the Postal Service is a leader in letter processing, it could improve its operations by adopting some of the “best practices” used by presort mailers, including: •Assessing and streamlining their network in a more timely manner based solely on the business case. •Relying on a flexible workforce (volumes drive employee work hours, and employees cross crafts). •Using automated or mechanized tray systems consistently to reduce the need for manual operations. What other practices can you suggest to help the Postal Service with First-Class Mail processing, even as volumes decline? This topic is hosted by the Office of Audit Network Optimization team.

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