OIG audit of USPS Same Day Delivery Pilot Program in the San Francisco District
In response to increasing parcel volume and the changing needs of customers,1 the Postal Regulatory Commission (PRC) approved the pilot in the San Francisco District in November 2012. The PRC based its approval on the city’s population density and the number of possible delivery areas available.2 Under this concept, a customer could make an online purchase from a Metro Post retailer, have it processed3 by 2 p.m., and receive his or her shipment the same day between 4 p.m. and 8 p.m. in the San Francisco, CA, 941 ZIP Code areas. The Postal Service determines the required staffing and optimal routes for pickups and deliveries4 from the retailers for same day delivery to the customers. It planned to gather sufficient data during the 1-year pilot to support its decision to request an extension for an additional year, establish the service as a permanent product on a quicker timeline, or terminate the test early.Conclusion
The Postal Service did not properly implement the pilot. They did not have sufficient participation from the six selected retailers to achieve the required daily minimum target of 200 packages per delivery day. Only 95 packages were sent by the six participating retailers over a 5-month period. Implementation of the pilot in the San Francisco District was based on the expectation of agreements with several large retailers. However, only one large retailer agreed to participate in the pilot, and later withdrew prior to implementation due other operational priorities. The Postal Service was left with small local retailers that could not produce the target daily package volume. The Postal Service earned $760 and incurred costs of $10,288, with a net loss of $9,528.
Officials initiated suspending the pilot in the San Francisco District by March 1, 2014, which will allow time to notify customers of the change. Officials further indicated they plan to re-initiate the program in the San Francisco District when they can secure large retailers’ participation. Officials have initiated the pilot in the New York District5 where large retailers are participating. Because the pilot will be suspended, we are not making any recommendations.
via Office of the Inspector General: Metro Post Same Day Delivery Pilot – San Francisco District Management Advisory Report
another failure for patrick donahoe’s future resume?
Only 95 packages were sent by the 6 participating retailers over a 5 month period; while the daily minimum target was 200 packages a delivery day. So lets put this in perspective – the minimum participation to make this program work would be approximately 30,000packages over 5+ months, and there was only 95PACKAGES.
Honestly, how could management not have a clue that this program would not work before they threw all this money at it. How do they plan to get out of the red with this type of leadership?
And not one person in postal mgmt. will be held accountable, for yet, *another* one of their poorly implemented, money losing ideas.