One option is to “Eliminate duplicative staff positions and better position area management to work
strategically with headquarters by relocating all area offices to headquarters.”
A recent audit report issued by the USPS Office of Inspector General:
Since 1992, the Postal Service’s workforce has decreased by almost 106,992
employees (13 percent); the cumulative total factor productivity has increased
approximately 11 percent; and mail processing automation has improved. By FY 2010,
mail volume is projected to be at the level it was in FY 1992. Since 1992, the Postal
Service’s field structure has also changed. The number of area offices has decreased
from 10 to eight and the number of district offices has decreased from 85 to 74.
However, a 2003 study for the President’s Commission on the Postal Service (“the
Commission”)4 suggested that, while the management structure was appropriately lean,
there was a real opportunity to continue to rationalize the network with regard to the
number of districts, post offices, and processing plants and this effort could enable a
reduction in the number of areas. Further, in 2007, the OIG recommended the Postal
Service develop a comprehensive workforce plan to assist with making decisions about
structuring and deploying its workforce.5
Conclusion
The Postal Service has significant opportunities to reduce costs by consolidating its field
structure. We identified two options the Postal Service should consider that would
reduce the number of area and district offices. Further, we identified a third option the
Postal Service should consider that would relocate area offices to headquarters. The
Postal Service should develop a comprehensive strategic plan that would guide future
field structure decisions and explore the viability of relocating area offices to
headquarters. At a minimum, this strategic plan would provide the Postal Service with a
method to evaluate and define an economic, efficient, and effective field structure to
oversee its universal service mission. The strategic plan would also provide the needed
foundation to develop a more flexible area and district field structure and workforce that
is responsive to changing demand. During the development of a comprehensive
strategic plan, fundamental issues such as the functional need for area and/or district
offices, right-sized staffing, operational impact, geographic distribution, and the ideal
location for area offices should be addressed.
Although the Postal Service recently consolidated one area and six district offices, we
identified three other options, done separately or in combination, to consolidate its field
structure further:
- Eliminate 14 offices by consolidating districts that have offices within 50 miles of
another district office.
- Eliminate four area and 32 district offices by consolidating those offices whose
workhours and mail volume are both below the mean mail volume and workhours.
- Eliminate duplicative staff positions and better position area management to work
strategically with headquarters by relocating all area offices to headquarters.
Implementing option 1, the most conservative of the options, closing district offices that
are within 50 miles of one another, the Postal Service can save approximately
$33.6 million annually or $289 million over 10 years. See Appendix C for monetary
impact. Option 2, closing area and districts that have less than the mean mail volume
and workhours, the Postal Service can save approximately $104 million annually or
$894 million over 10 years. We did not estimate the cost savings that could be realized for option 3 due to the many factors associated with such a move. However, we believe this option provides both overall cost savings and other non-financial benefits.