Background

One of the Postal Service’s key initiatives of its Delivering for America 10-year plan is to revitalize nearly 19,000 delivery units by targeting markets where it can aggregate delivery units into fewer, larger, centrally located sorting and delivery centers (S&DC). According to the Postal Service, S&DCs will have package sortation equipment, standardize operations, and reduce mail handling costs. The first S&DC was opened in November 2022, and a total of 29 were implemented by the end of September 2023.

What We Did

The objective of this audit was to evaluate whether the Postal Service established and met operational goals for the implementation of S&DCs. We focused on the 29 S&DCs that began operations in November 2022 through September 2023, and judgmentally selected six to observe delivery operations and interview Postal Service management.

What We Found

The Postal Service established operational goals for the implementation of S&DCs through a scorecard containing 52 metrics that monitor service performance, operational efficiency, and potential plant impacts. On average, the S&DCs met goals for only three of the 17 metrics reviewed but were within five percentage points of the goal for an additional eight metrics. Additionally, the S&DCs performed better than the nationwide average for delivery units for eight of 14 comparable key metrics. The metrics where S&DCs underperformed were primarily related to carrier efficiency.

When considering the above comparisons, our collective data analysis, and our observations, we identified the following opportunities for improvement of S&DC performance. Specifically, S&DCs 1) did not consistently achieve city carrier route performance goals, which resulted in the Postal Service incurring additional overtime costs of $1.4 million from January to April 2024; 2) did not consistently meet the machine efficiency (mailpieces per hour) goal; 3) continued to not meet their scheduled goal for Post Office Box mail availability; and 4) had overburdened rural routes — or routes that took longer than the standard hours.

Recommendations and Management’s Comments

We made six recommendations to address the issues identified in the report. Postal Service management agreed with one recommendation and disagreed with five. Management’s comments and our evaluation are at the end of each finding and recommendation. The U.S. Postal Service Office of Inspector General considers management’s comments responsive to recommendation 1 and will work with management through the audit resolution process on the other five.