Audit Reports

Background 

In October 2023, the U.S. Postal Service deployed a major change to operations when it began piloting its Local Transportation Optimization (LTO) initiative. The initiative was designed to reduce the number of transportation trips to and from select post offices and increase the amount of mail transported on each trip. In addition, mail collected at optimized post offices remained there until the next day, delaying its entry into sorting operations. As of January 2025, the Postal Service had implemented LTO across 17 regions, including 56 post offices in the New Orleans region. The Postal Service has since expanded the LTO pilot program to a nationwide initiative, renaming it to Regional Transportation Optimization, and adjusted service standards. Implementing potential cost saving initiatives that result in mail taking longer to reach customers increases the risk that customers find quicker and more reliable alternatives. 

What We Did 

Our objective was to determine the impacts associated with the Postal Service’s LTO initiative in the New Orleans region. We analyzed service performance before and after LTO implementation, customer impacts, and regional transportation schedules and costs. We also judgmentally selected and conducted observations and interviews at 21 post offices and two processing facilities in March 2025. 

What We Found 

Consistent with our findings from previous reviews of LTO, implementation in the New Orleans region resulted in a decrease in service that disproportionately impacted rural communities. We also found that Postal Service staff did not complete the required scans to help customers track packages, and that some transportation trips were not feasible to complete or did not align with the documented schedule, which can impact the timely processing of mail. Finally, the Postal Service did not effectively track cost savings specific to the LTO initiative in the New Orleans region. 

Recommendations and Management’s Comments 

We made five recommendations to address issues with processing, scanning, and transportation schedules identified in the report. Postal Service management agreed with four recommendations and disagreed with one. 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 recommendations 3, 4, and 5 as corrective actions should resolve the issues identified in the report. We will work with management on recommendations 1 and 2 through the audit resolution process.