• on Jan 3rd, 2011 in OIG | 15 comments
    It’s that time of year again. Those of us helping on the Office of Inspector General blog have come up with a list of the top 10 postal stories for 2010. Tell us about any stories we missed and add whatever comments you think appropriate. In particular, we would like to get your input on the top story, so take a minute and vote in the poll below. 10. OSHA Fines the Postal Service – At plants across the country, the Postal Service receives sizeable fines for electrical hazards. 9. e-Tipping Point – A flurry of activity in 2010 bolsters the notion that the Digital Revolution has trumped paper-based communications: Apple introduces its iPad tablet computer; all e-reader sales are up nearly 80 percent over last year; the Kindle becomes Amazon’s biggest seller and the company predicts e-books will surpass paper books within a year; Netflix announces that more customers watch streaming videos than DVDs. 8. Congress Takes Notice – Members from both houses of Congress – and both sides of the aisle – introduce legislation to fix the Postal Service’s overpayments to the federal government, which contributed significantly to the Postal Service’s massive net losses over the past few years. 7. America Wakes Up – Widespread mainstream media coverage on a number of postal issues, including 5-day delivery and the financial challenges plaguing the organization, spark a national interest in our postal system. 6. Reports Address Flawed Business Model – The Government Accountability Office confirms that the Postal Service’s business model is ”not viable.” The Postal Service issues its action plan to address declining mail volumes, changing communications habits and other systemic problems. 5. Stakeholders Debate 5-Day Delivery – The Postal Service’s plan to eliminate Saturday delivery generates heated debate, massive press coverage and congressional input. The Postal Regulatory Commission holds a series of public hearings on the topic. 4. PMG Potter Retires – After nearly 10 years as the postmaster general and 32 years with the Postal Service, Jack Potter called it a career and retired on Dec. 3. 3. Postal Service Suffers Largest Net Loss in History – The Postal Service ends FY 2010 with a net loss of $8.5 billion, the largest net loss in its history. Still, it manages to pay all of its bills and remain solvent at the start of FY 2011. 2. OIG Finds $75 Billion Overpayment – A report by the Office of Inspector General finds that the Postal Service has overpaid its Civil Service Retirement System obligations by a staggering $75 billion. Mailing industry unites in its support of a congressional fix. 1. PRC Denies Exigent Rate Request – The Postal Service invokes the exigency clause in the Postal Accountability and Enhancement Act and asks for a price increase above the inflation-based price cap. Mailers unite in their opposition to the request, which the Postal Regulatory Commission officially denies in September. The Postal Service appeals the decision to federal appeals court.
  • on Sep 29th, 2010 in Strategy & Public Policy | 7 comments
    The U.S. Postal Service is used to delivering large amounts of mail. Last year, it delivered more than 177 billion pieces. More mail pieces are sent per person in the United States than almost anywhere else in the world. But mail volume has been declining. How will the Postal Service change if volumes continue to fall? Is the Postal Service even financially sustainable at lower volume levels? The Office of Inspector General (OIG) asked the George Mason University School of Public Policy (GMU) to find out. The results of GMU’s work appear in a paper released today on our website. GMU researchers looked at how mail volumes of 150, 125, 100, and 75 billion would affect the Postal Service’s financial position and cost structure. Their results are encouraging. They found that the Postal Service is financially sustainable at volume levels down to 100 billion pieces per year, although price increases above inflation would be needed. The cost structure of the Postal Service would also change at lower volume levels. For example, delivery would account for a much larger share of total costs. GMU researchers also looked at the effect of various cost reduction initiatives and how they would impact the price increases necessary to break even. The paper describes their results and a description of the model they used for their analysis. What do you think? What are the biggest challenges for the Postal Service at lower volume levels? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).
  • 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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