North Dakota has experienced the nation’s fastest-growing population, growing 7.6 percent since 2010 compared to 2.4 percent nationally. The state’s jobless rate was the lowest in the nation (2.8 percent) in July 2014. This is due to significant employment opportunities resulting from the oil boom in the Bakken Shale formation in western North Dakota. However, beginning in November 2014, a plunge in oil prices has resulted in the elimination of thousands of oil-related jobs and slowed growth trends previously experienced in North Dakota.
The state’s population growth has created a 14 percent increase in U.S. Postal Service delivery points and a 165 percent increase in package deliveries in the last 4 years. During that same time, delivery points nationally increased 1 percent and packages 21 percent. The state has four mail processing sites that sort and distribute mail for 333 post offices. In FY 2014, these four sites processed 678 million mailpieces.
This audit responds to a request from Senator Heidi Heitkamp to review concerns about mail service. Our objective was to assess selected Postal Service operations in North Dakota.
What The OIG Found
The Postal Service has taken action to improve mail service in North Dakota, such as hiring additional employees, detailing personnel to supplement the workforce, authorizing overtime, and adding retail units. However, more improvements can be made. Specifically, the Postal Service did not always timely process, deliver, and transport the mail in North Dakota. In addition, it lacked sufficient retail windows to meet demand and some box up-times (the posted time mail is available to the customer at their PO Box), were inaccurate.
These conditions occurred because the Postal Service did not have an established contingency plan to address rapid changes in the population growth and staff turnover. We found that North Dakota’s postal facilities lacked adequate mail processing equipment and processing floor space and sufficient delivery staff and retail operations. In addition, Postal Service mail received from FedEx at the Grand Forks, ND airport did not always allow for the timely transport of mail. Additionally, changes in box up-times were not always adequately communicated.
Due to these operational challenges, the Postal Service in North Dakota rarely met national service standards. Furthermore, delivery staff was overworked, with rural carrier overtime increasing by 241 percent between fiscal years (FY) 2011 and 2014. Additionally, carriers returning from their routes after 5 p.m. ranged from a low of 23 percent to a high of 56 percent between FYs 2012 through 2014. Finally, customers experienced excessive wait times at some retail locations.
What The OIG Recommended
We recommended the district manager, Dakotas District, install additional mail processing equipment, consolidate Fargo operations, develop a contingency plan to address staffing levels during periods of rapid economic growth or retraction and ensure accurate postings of box up-times. We also recommended the vice president, Network Operations, modify the transportation network.