Objective

Our objective was to assess the effectiveness of the Postal Service’s use of overtime for Postal Vehicle Service (PVS) drivers in the Houston District.

The Postal Service has a PVS fleet to move mail between processing facilities, inner-city delivery offices, and local businesses and mailers. PVS is primarily used for distances within a 50-mile radius of their Postal Service location. The PVS fleet currently consists of 2,366 cargo vans, 2,106 tractors, and 374 spotters (vehicles used to move trailers within a Postal Service yard operation).

The Postal Service tracks PVS driver overtime, penalty overtime, and total workhours, as well as total overtime cost data for 62 of its 67 districts. The Alaska, Appalachian, Arkansas, Dakotas, and Sierra Coastal districts do not have significant PVS operations. For the 62 districts, fiscal year (FY) 2017 average overtime hours were about 15 percent of total PVS hours costing over $90 million in overtime.

The North Houston Processing and Distribution Center (P&DC) is the only facility in the Houston District with PVS operations. The Houston District had the fifth highest total overtime as a percentage of total workhours (about 19 percent), which cost the Postal Service over $2.4 million in FY 2017.

Transportation management at the North Houston P&DC completed a Zero Base Review, an annual review conducted each year to optimize PVS operations in FY 2017 and FY 2018. The planned PVS overtime percentage for FY 2018 was about 13 percent (over $1.8 million) for the North Houston P&DC; however, their actual overtime percentage was about 22 percent (about $3.3 million) for the same time period. Therefore, the Postal Service has incurred additional unbudgeted overtime costs of over $1.4 million.

What the OIG Found

The North Houston P&DC’s use of overtime could be more effective. Specifically, management spent about $2.4 million on overtime in FY 2017 and about $3.3 million on overtime in FY 2018 to meet daily operational needs. Additionally, the North Houston P&DC used overtime hours to staff a Sunday Hub Priority Mail Pilot program.

As a result of the FY 2017 and 2018 Zero Base Reviews, transportation management at the North Houston P&DC identified driver shortages and determined the need to adjust driver start times, eliminate stand-by time, and align schedules and staffing across all tours of operation.

At the end of the 2017 Zero Base Review, transportation management estimated that implementing these actions would result in a savings of about $180,000 in PVS operational costs for FY 2018. However, we reviewed mile and workhour schedules as of June 4, 2018, and identified the $180,000 savings were not realized. Instead, the North Houston P&DC had an increase of about $539,000 in PVS operational costs.

Transportation management at the North Houston P&DC understood that the Collective Bargaining Agreement prevents adjustments to the schedule alignment identified in the 2018 Zero Base Review until the beginning of FY 2019. However, transportation management can reduce overtime immediately by adjusting driver start times and eliminating stand-by time. As of July 28, 2018, the North Houston P&DC Transportation Manager adjusted start times for 12 of the 178 PVS drivers. However, we analyzed the PVS driver schedules for FY 2018 and found over 200 hours of stand-by time each day, as of June 2018, at a cost of about $1.9 million.

North Houston P&DC management attributed the PVS overtime to:

  • A shortage of 46 drivers (26 percent) of the 178 authorized.
  • The lengthy process to remove drivers no longer able to perform their duties and to hire new drivers.
  • The inability to effectively use part-time flexible drivers to adapt to changing needs.

As a result of using more overtime than the planned amount and not eliminating stand-by time, the North Houston P&DC incurred over $3.3 million in questioned costs for FY 2018.

As a result of our analysis, transportation management took corrective action and decreased the Sunday Hub Priority Mail Pilot program’s usage of overtime by scheduling only part-time flexible drivers, which resulted in the usage of straight time instead of overtime. This scheduling change resulted in over $13,000 of savings from July through September 14, 2018.

What the OIG Recommended

We recommended management coordinate with Human Resources and P&DC officials to develop a plan to address long-term vacancies and expedite the hiring of part time flexible drivers and develop PVS schedules that align with operational windows and needs.

Read full report

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