Background

In October 2013, the U.S. Postal Service entered into a Negotiated Service Agreement (NSA) with Amazon Fulfillment Inc. (Amazon) to deliver parcels on Sunday. This agreement is a specific contract the Postal Service executes with a single customer to increase revenue, improve operations or yield other benefits to the Postal Service. Carriers are to deliver Amazon Sunday parcels to customers in a logical and efficient order over multiple ZIP Codes using the Dynamic Routing Tool (DRT). The Postal Service’s DRT software creates a street route based on estimated miles traveled and the number of parcels for each route.

At the end of April 2014, the Sunday service was operating at 459 Postal Service hubs in 22 districts in the Pacific, Eastern, Southern, Great Lakes, and Northeast areas. Over 2.7 million parcels were delivered to customers on Sunday from these locations from January 1 through April 6, 2014. The Postal Service is in the process of adding Sunday delivery service at 786 additional hubs in 24 more districts across the country.

Our objective was to assess the Postal Service’s Sunday delivery service from an operational standpoint.

What The OIG Found

Operational inefficiencies existed during Sunday parcel deliveries in scanning, sorting, vehicle loading, and using the DRT software in street delivery at 40 of 134 hubs we visited in four districts. These inefficiencies occurred primarily because management did not always enforce policies and procedures and supervision was inconsistent at some hubs.

As a result, the Postal Service spent 17,446 more hours from June 15 through July 13, 2014, than DRT software required to conduct Sunday delivery operations. By improving efficiency, the Postal Service could reduce operating costs annually by $356,736 for 134 hubs in the districts we visited.

What The OIG Recommended

We recommended the vice presidents, Eastern, Northeast, Pacific, and Southern areas, direct managers in the Ohio Valley, Northern New Jersey, San Diego, and Dallas districts to eliminate inefficient operational practices, reduce workhours cited, and ensure adherence to Postal Service policies and procedures for Sunday parcel delivery service.