• on Mar 21st, 2011 in Post Offices & Retail Network | 26 comments
    [dropcap style="font-size: 60px; color: #9b9b9b;"]I[/dropcap]n fiscal year 2009, the U.S. Postal Service spent more than $149 million in manufacturing, shipping, and fulfillment costs for Express Mail® and Priority Mail® packaging supplies. The Postal Service, like FedEx, provides these supplies at no cost to customers and the public. The packaging is Postal Service property and, therefore, should only be used to send Express and Priority mail packages. However, some customers use the boxes, envelopes, and labels for other purposes and in some cases, customers use the packaging to mail items using the Postal Service’s competitors. This adds additional costs to the Postal Service and violates federal law. The question is balancing the desire to control costs with maintaining the convenience that customers desire. The Postal Service must ensure the supplies it provides are used appropriately, but what’s the best way to do this? Are the savings worth the logistics and costs of monitoring and the inconvenience for customers? How do competitors monitor the use of packaging supplies? This topic is hosted by the Office of Audit Field Financial – West team.
  • on Mar 14th, 2011 in Strategy & Public Policy | 13 comments
    How can the Postal Service solve its financial problems? What is the future role of the Postal Service at a time when digital alternatives are replacing many of the functions of hard copy mail? These are the questions facing policymakers and the postal community. Sometimes the best way to answer serious questions is to ask even more questions. A deeper look at foundational issues can provide valuable guidance for reaching the right decisions. Last month, the OIG issued a white paper Fundamental Questions for the Future of the Postal Service. In the paper, we pose eight questions that we think are fundamental for determining the role of the Postal Service in the 21st century: 1. What is the nation’s essential need for the Postal Service in the 21st century? 2. Is a profit-driven business or a national infrastructure best suited to carry out the Postal Service’s mission? 3. How should the nation’s Postal Service be financed? 4. What is the proper governance model for the Postal Service? 5. What does the universal service obligation mean? 6. Does monopoly-financed universal service assist or harm the Postal Service? 7. Should the Postal Service be allowed to expand into nonpostal services to supplement monopoly shortfall? 8. Should the Postal Service have additional social responsibilities beyond its core mission? We are raising these questions not to provide answers but to spur discussion. We want to hear your views. What do you think the right answers are? Have we left any fundamental questions out? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).
  • on Mar 7th, 2011 in Mail Processing & Transportation | 3 comments
    [dropcap style="font-size: 60px; color: #9b9b9b;"] E [/dropcap]very day, thousands of containers holding letters and large envelopes are flown across the country to meet Postal Service standards. As you might expect, in almost every case, it costs more to fly mail than to ship it on a truck or by train. Because of this, from a cost standpoint, it’s important that each mail container is filled to capacity. While conducting prior audits on other issues, we observed that large mail processing facilities were running multiple processing machines – even with declining mail volume. Running one machine full time to process mail results in full mail trays and tubs, while running multiple machines to process the same amount of mail results in multiple partially-filled trays and tubs. Running multiple machines may be efficient for processing facilities, but it results in transportation inefficiencies and increases costs. When you consider that it costs the Postal Service about a $1 per pound to fly mail, the cost of flying partially loaded mail trays and tubs could be substantial. In our current audit, we plan to look at information related to the density of First Class Mail on air transportation and assess the related costs, and we’d like your views. What do you think? How can the Postal Service make sure only full containers fly? One option might be to identify mail needing air transportation and process it separately from other mail? Is that a good option or would you recommend other methods? The Office of Audit Transportation team is hosting this topic.

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