on Jun 18th, 2010
in Mail Processing & Transportation
| 40 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.
on Mar 29th, 2010
in Mail Processing & Transportation
| 15 comments
By Jim O’Brien
Back in 1990, Halstein Stralberg coined the term “automation refugees” to describe Postal Service mail processing employees who were assigned to manual operations when automation eliminated the work they had been doing. Since the Postal Service couldn’t lay off these employees, they had to be given something to do, and manual processing seemed to have an inexhaustible capacity to absorb employees by the simple expedient of reducing its productivity. The result was a sharp decline in mail processing productivity and a sharp increase in mail processing costs for Periodicals class. Periodicals class cost coverage has declined steadily since that time. Along with other efforts to get to the bottom of this issue, the Postal Service and Periodicals mailers formed a Joint Mail Processing Task Force in 1998. Halstein Stralberg and I were participants in this effort. We were puzzled by the fact that the flat sorting machines always seemed to be down during our seventeen Postal facility visits, in spite of the fact that they were supposed to run seventeen hours per day and that we visited facilities at all hours of the day and night. We were able to see the “bullpens” where mail processing employees manually tossed bundles of periodicals into rolling containers. Although the machines were down, the bullpens and other manual operations were always up and running. Fast forward to 2010. More Periodicals mail is manually processed than ever, and manual productivity continues to decline. Periodicals Class now only covers 75% of its costs. How can this dismal pattern of declining productivity and rising costs continue more than two decades after it was first identified, especially when the Postal Service has invested millions of dollars in flats automation equipment? How can the Postal Service continue to imply that Periodicals mailers are responsible for the cost coverage problem when mailers have substantially and consistently increased Periodicals worksharing? Yes, the recession did result in fewer advertising pages and lower revenue from Periodicals class mail, but the twenty-year-old elephant in the room continues to be the unanswered question of automation refugees and their impact on cost coverage. This issue would make an excellent subject for the OIG to investigate. The Postal Service should NOT be permitted to continue using Periodicals class mail processing as a dumping ground for its excess labor and the associated costs. What can be done to address the “automation refugees” issue? If Periodicals class mail is carrying a disproportional share of automation refugees, are there other areas where these employees can be used more effectively? Mr. O’Brien is the Vice President, Distribution & Postal Affairs for Time Incorporated. He is the Chairman of the Mailers Council, former Chairman of the Association for Postal Commerce (Postcom), former Chairman of the Magazine Publishers of America (MPA) Postal Committee, and a member of the MPA Government Affairs and Postal Committees. Mr. O’Brien has been involved with the printing, publishing, and distribution of magazines for more than 35 years. Prior to joining Time Incorporated in 1978, he held positions with R.R. Donnelley & Sons Company, United Parcel Service, and U.S. News & World Report. He is also the former CEO of Publishers Express, an alternative delivery that competed with the Postal Service in the delivery of magazines and catalogs. DISCLAIMER: The views expressed in this post are solely those of Mr. O’Brien and do not necessarily represent the views of the United States Postal Service or the Office of Inspector General. The U.S. Postal Service Office of Inspector General cannot guarantee the source, originality, accuracy, completeness, or reliability of any statement, data, finding, or opinion presented by this guest blogger.
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