During the COVID-19 pandemic, the Postal Service had workforce shortages while package volumes were surging, causing service performance for packages to suffer. In response to this critical situation, and to achieve its goal of expanding its share of the package delivery market, the Postal Service purchased and deployed new package sorting machines, including the Single Induction Package Sorter (SIPS).
What We Did
Our objective was to evaluate the U.S. Postal Service’s strategic plan for and performance of the SIPS machine. To complete our evaluation, we reviewed the business case justification for the machines and analyzed package sorter usage data. We also conducted observations at judgmentally selected mail processing facilities, interviewed management, and determined reasons for high or low performance.
What We Found
The Postal Service successfully deployed the package sorters to increase sorting capacity, which reduced manual processing and improved service performance for packages. Additionally, the Postal Service is on track to achieve planned return on investment through improved package processing efficiency.
Overall, the Postal Service met the SIPS goals for pieces processed per hour on a nationwide average. However, 33 facilities did not meet this goal.
Further, we identified 21 package sorters that were significantly under used. This occurred because the Postal Service did not have a complete strategy to optimize processing after the initial deployment goals were met. We estimate the Postal Service incurred unnecessary cost by purchasing and underutilizing several SIPS machines. The underutilized SIPS machines represent $38.3 million in questioned costs.
We recommended management (1) determine if SIPS machines at facilities not meeting throughput goals are being used to optimize efficiency; and for those that are not, instruct facilities on how to use SIPS machines; and (2) develop and implement an official strategy for Single Induction Package Sorter machines to address underutilized machines.
USPS Proposed Resolution
Determine if Single Induction Package Sorter (SIPS) machines at facilities not meeting throughput goals are being used to optimize efficiency, and for those that are not, instruct facilities on how to use SIPS machines.
Develop and implement an official strategy for Single Induction Package Sorter machines to address underutilized machines.