Objective

Our objective was to evaluate the U.S. Postal Service’s strategy to improve First-Class Mail (FCM) service performance scores in the Northeast Area.

The Postal Service has service standards (timeliness goals) for delivering FCM after receiving it from a customer. A service standard represents the level of service the Postal Service attempts to provide to its customers.

The service standard is determined by which geographic location mail originates from (comes from) and to which geographic location mail is destined (goes to). A mailpiece’s combined origin and destination is known as a service pair and examining these pairs allows the Postal Service to evaluate service performance based on the mail’s origin, destination and a combination of both.

The Postal Service measures six FCM service performance goals: External First-Class Mail (EXFC) measurement system, 2-Day and 3-5 Day mail delivery, Commercial Mail overnight, 2-Day and 3-5 Day mail delivery, and First-Class Package Service - Retail delivery. Each performance goal is measured as a percentage score out of 100 percent.

EXFC measures the service performance of single piece FCM letters, flats, and postcards from the time a test piece is deposited into a collection box or post office lobby chute until it is delivered to a home or business. The Postal Service measures performance for First-Class Package Service - Retail delivery using an internal system that measures the transit time from mailing to delivery and measures service performance for Commercial FCM (business mailings with a minimum of 500 pieces) from the date the Postal Service takes possession until a barcode scan to document delivery.

Northeast Area management said they use the annual and quarterly Hoshin planning process to align headquarters, area, and district objectives and goals to improve service and operational performance. Northeast Area management described Hoshin plans as the master set of overarching strategies used to conduct continuous improvement projects.

The fiscal year (FY) 2018 Hoshin plans for the Northeast Area and the 10 districts included 151 objectives with over 380 continuous improvement projects, such as improving service for FCM Letters and Flats, 3-5 Day First-Class Commercial Letters, and First-Class Parcels.

We chose the Northeast Area because it had the lowest performance by a Postal Service area for both 2-Day and 3-5 Day EXFC service scores from FY 2015 to 2017.

In September and October 2017, we conducted site observations at six Northeast Area Processing and Distribution Centers (P&DC). We selected three facilities with the highest EXFC service performance scores and three facilities with the lowest scores. EXFC service performance scores at the three higher scoring facilities averaged about 93 percent on-time, while scores averaged 89 percent on-time at the lower scoring facilities.

What the OIG Found

Overall the Northeast Area Hoshin plans for FY 2018 align headquarters, area, and district goals and objectives for improving service and operational performance.

During the audit, we identified that the Hoshin plans for the Northeast Area and the ten districts were incomplete. Specifically, fields were blank or not current for one or more of the following:

  • Project owner;
  • Project type;
  • Planned dates;
  • Project status; and
  • Project impact.

The Postal Service’s Hoshin plan guidance requires completion of the fields listed above. We told management about the blank and not current fields on April 2, 2018. In response management attributed the missing or incomplete field information to inadequate training of the owners and/or person assigned to update the plan. Additionally, management said the fields are completed at the individual project level in the Postal Service’s Project Knowledge System (PKS). Despite Postal Service guidance, management said they did not believe there was a need to complete all the fields in Hoshin plans because the information was in the PKS. Subsequently on April 13, 2018, management sent the OIG updated Hoshin plans that were now complete.

When employees do not follow Hoshin guidance and plans are incomplete, project accountability can be lost, desired outcomes may not be measured or realized, and management decisions or actions concerning achievement of overarching strategies from continuous improvement projects could be inconsistent.

As of Quarter 4, FY 2017, Northeast Area EXFC service performance scores were about 94 percent on-time for 2-Day service and almost 86 percent on-time for 3-5 Day service. These scores were below the national goals of 96.5 and 95.25 on-time service by over 2 and 9.5 percentage points, respectively.

Northeast Area Commercial FCM service performance scores were about 94 percent on-time for overnight service, almost 95 percent on-time for 2-Day service, and almost 92 percent on-time for 3-5 Day service. These scores were below the national goals of 96.8, 96.5, and 95.25 on-time service, respectively, by about 2 to 3 percentage points. In addition, the First-Class Package Service - Retail service performance score was over 90 percent on-time service, but was more than 4 percentage points below the national goal of 94.8.

When the Northeast Area does not meet mail service standards, customers in the area and across the nation are negatively impacted.

We analyzed EXFC service performance scores for over 4,000 service pairs that sent FCM from the Northeast Area to other areas and from other areas to the Northeast Area from January 2015 to September 2017. We determined that almost 93 percent of the service pairs were below the Postal Service’s performance goals.

Specifically, we found that 2-Day mail service pairs met the on-time service performance goal of 96.5 percent only 14 percent of the time. The 3-5 Day mail service pairs met the on-time service performance goal of 95.25 percent only 1.6 percent of the time. As a result, customers cannot use service standards to determine how long it will take for mail to reach its destination.

Northeast Area FCM service performance goals were not achieved because of failures in collection, processing, transportation, and delivery. Northeast Area management said the service performance failures were due to:

  • Missed mail collection box pickups;
  • Delivery unit mail arriving late at processing facilities;
  • Mail not processed timely and missed transportation deadlines;
  • Mail processing machine maintenance issues; and
  • Weather-related delivery and transportation delays.

Overall, Northeast Area management said failures can happen anywhere and achieving service performance goals would require near perfect conditions in terms of weather, traffic, and machine performance.

Finally, during our Northeast Area P&DC site observations, we generally identified that all six P&DCs were using similar best practices, including the use of data to track machine, transportation, and service performance. We also found that management shared performance, staffing, transportation, and operational challenges during shift change and weekly area meetings.

What the OIG Recommended

We recommended management:

  • Establish an ongoing process to ensure all Hoshin plans are complete and current;
  • Assess and implement Hoshin training to ensure that employees involved with Hoshin plans fully understand their responsibilities; and
  • Evaluate and determine the relevance of current FCM service performance goals considering the service pairs that do not meet goals.

Read full report

Comments (5)

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  • anon

    I have noticed that our mail delivery has degraded over the past year. To wit: A. Mail returned for no known address when the location was valid and within 1 mile of the delivering post office B. A package with signature required left the same post office - and was never received - never recovered C. A package left the same PO for delivery , shown as delivered, but was not received - in both of the previous examples the officials indicated they would review and call - in example - not satisfaction and all they would offer was payment - when the items not received were not replaceable - example C. they did not even have the courtesy to call with a response (twice followed up) D. Received mail postmarked 1 June but received 14 June - which resulted in our being denied a discount on a billing as the delay did not meet the required response. E. First Class mail sent but never delivered - contained check (never cleared bank) F. First Class mail sent - delayed delivery - when finally received after approximately two weeks - the envelope was mangled and torn to a point that it was nearly unusable (no comment by USPS) Attempted to speak to local manager but was never able to - was directed to others whose responsibility was not identified and in most cases without names - What exactly should a consumer expect of USPS with First Class mail even when selecting premium service (signature control/timely delivery/ and validation of delivery without fact.

    Jun 14, 2018
  • anon

    Being a retired postal employee of 40+ years, I am embarrassed how much the Services goals have sunk as well as actual late delivery times in the Western Region i.e. Oregon/Washington now being the norm. Many of my neighbors echo this opinion. Let’s do a better job guys!

    May 28, 2018
  • anon

    Oh Please...The objective of the report was to evaluate strategies to improve 1st class mail performance.. NE Area told you why it is not up to par. But you just went after the fluff. You want them to do better reporting. Really? You even recognized the causes but, once again, OIG sees trees, not forests. It is the same vicious circle again. Carriers are delayed going to the street because mail doesn't get to them on time and in a proper manner (the old IOP and load plans failures again). You can't be shocked to know that carriers are then getting back later. Now outgoing mail is delayed. Plants are already behind the 8 ball and they have the double whammy of not having enough skilled people in the plants. So sending plants are late. Receiving plants get late mail, have the same problems of not enough skilled workers. And...surprise....Mail gets to delivery units late and in bad mix. The circle starts over again. All the reports, management tools, planning targets, etc mean nothing and are worthless until management (and OIG) face the reality that the current understaffed, poorly run system will continue on until the underlying problems are addressed.. Hey, throw in the monkey wrench of the increased parcel load which slows delivery people down... Are you ever going to do a real audit nationwide on the real problems?

    May 24, 2018
  • anon

    Did, or does this lean process look at the structure in process model for unnecessary bin allocation? Was a change in scheme on the current mail processing program and equipment meet the need to expedite mail through the entire network to meet operational requirements and standards? When primary mail arrival is delayed, could a smaller sortation program be used to meet dispatch departure time commitments? Could a binary prefix sorting program aid in expediting mail to and from primary and destination sites? It seems that sorting programs do not adapt to mail volume to and from primary, secondary, and DPS sorting programs.

    May 23, 2018
  • anon

    I suppose each region has its own causes for under performance, but I can appreciate that the NE Region having traffic conditions, weather and non-weather, impact performance standards. What impact, whether positive or negative, does having a distribution center located in the dense traffic area of White Plains NY? For mail originating in central CT, going to Boston Area Destination, what impact does having that mail, go to be processed in White Plains NY have on performance standards if my understanding of the process is correct? Trucking mail to White Plains is on traffic congested I95, going to WP and then back again to Boston area. I am generally pleased with my mail service and I use the USPS frequently. I may send as many as 10 FCM pieces monthly and I am a senior.

    May 23, 2018