This report presents the results of our self-initiated review of the Nonmachinable Outside (NMO) Parcels Pilot Program (Project Number 14RG020MS000). Our objective was to evaluate costs associated with the pilot program to process NMOs using an outside contractor. In the future, we plan to evaluate productivity and efficiencies associated with NMO processing.
NMO parcels are packages that, because of their size, weight, or other characteristics, cannot be processed on machines and must be handled manually.1 This is more labor-intensive and costly than automated processing. The parcels are called “outside” because they cannot be placed in sacks or other mailing containers for automated mail processing.
NMO optimization is part of the U.S. Postal Service’s Delivering Results, Innovation, Value and Efficiency Initiative 1: Optimize Network Operations. One of the initiative’s goals is to reduce ground transportation costs by $1 billion between fiscal years (FY) 2012 and 2017. The Postal Service projected savings for NMO optimization to be in FY 2014, Quarter (Q) 4, which is percent of the total network operations optimization goal.
As part of the NMO optimization plan, in December 2013, the Postal Service started a 6-month pilot program2 with a single contractor in two Network Distribution Center (NDC) service areas.3 The objective was to develop, test, and analyze alternatives to process NMOs and leverage the contractor’s automated network to increase efficiencies and improve service. A Postal Service facility would transport NMO parcels to a nearby contractor facility, where they would be sorted and transported to Postal Service destination delivery units (DDU) or processing facilities. In addition, at the completion of the pilot the Postal Service planned to evaluate the results and to assess whether to implement the program nationally.
If the pilot program proves profitable, the Postal Service envisions receiving NMO parcels at its retail counters, sending them to the contractor for processing, and retrieving them for last mile delivery at the DDU or destinating processing facility. The Postal Service plans to competitively bid the contract work if it elects to implement the NMO program permanently.
Conclusion
The Postal Service did not consider about in operational expenses when developing the cost estimates for the NMO pilot program. This figure represents about percent of the $8.5 million contract price. Specifically, the Postal Service did not account for internal labor costs of for additional labeling and manual loading or internal transportation costs of to transport NMOs to the contractor.
We also noted the Postal Service did not conduct complete cost-benefit analyses when the pilot was done
So in laymans terms we r not Charging enough?? well got on tht, and correct it!!
Regardless of the cost this pilot program was going to be deemed a success, so if you already know the outcome that you desire why be burdened with pesky studies? The USPS wants to privatize so the cost is not important as long as the end result is achieved they can lose twice as much money as doing it in house and they’ll continue dismantling the people’s postal service
Competent businesses do what they call cost benefit analysis before initiating new work methods or making new products. Note I said competent. How can a business be so stupid as to not monitor the cost of implementing a new program? “Gee, we didn’t think of that”? It would make sense in the perverted world of the USPS, where they maintain marriage mail and lose millions every year because they “don’t want to lose the business”. Now, either that’s very stupid or somebody’s getting a kickback for low mail rates. But that would indicate bribery or wrongdoing, and we know management would NEVER do something like that.
This pilot program was to send out non-machinable parcels originating in the Chicago NDC service area to a UPS processing facility, bypassing the NDC,so yes, UPS does accept all types of parcels. Expect management to deem it successful and try to roll it out nationwide, the Mail Handlers union better be ready for a fight as it would have a big impact on them.
Isn’t that the mail that UPS doesn’t want to begin with because of all the extra handlings they have to do with them? Then when UPS does get the contract their sales reps will troll over to the customers and get the rest of their business.