Highlights from the USPS OIG Audit Report – City Delivery Efficiency Review – Northern Virginia District
 
Background

Delivery operations are the Postal Service’s largest operational function, accounting for approximately 45 percent of salary expenses and workhours. Despite an annual increase of approximately 1 million delivery points, delivery operations used 36.5 million fewer workhours in fiscal year (FY) 2009, because of effective growth management, increased use of automation, standardization of best practices, and improved productivity. Although delivery operations used fewer workhours, workhour reduction has not kept pace with declining mail volume. Nationally, city delivery mail volume declined by 3.9 percent in FY 2010. During this same period, mail volume declined in the Capital Metro Area by 2.4 percent, while workhours declined by 2.8 percent. The Northern Virginia District mail volume declined by 2.7 percent in FY 2010, while workhours declined by 3.2 percent

Audit
The U.S. Postal Service is delivering fewer pieces of mail to a growing number of addresses as new households and businesses are added to the delivery network each year. The Postal Service must achieve unprecedented levels of efficiency to accommodate this new growth while facing financial losses from declining mail volumes and rising costs.

The Northern Virginia District was not operating at peak efficiency and could reduce city delivery operating costs. Our benchmarking comparison determined the Northern Virginia District used approximately 16 minutes more per day than the national average for each carrier route, compared to the standard for that route. This equated to more than 103,000 workhours annually. The measurement for this factor, called percent to standard,2 was 123.24 – about 17 percentage points above the national average of 105.95 percent.

Although numerous factors were involved, our review of 20 randomly selected delivery units confirmed these inefficiencies and determined Northern Virginia District management did not always (1) provide sufficient review and oversight of unit offices’ operating efficiencies and (2) coordinate with the mail processing facility to ensure mail was timely received and in a condition that promoted operating efficiency. Eliminating time-wasting  practices and increasing focus on efficiency could allow management to reduce workhours.  

Some examples include ensuring that:

• Management provides sufficient oversight of morning and afternoon office operations.  
• Vehicle inspection process is efficient.  
• Carriers are timely and correctly clocking into afternoon (p.m.) office time.  
• Units receive the proper mix from the processing facility per the integrated operating plan (IOP).3  
• Carriers spend less time waiting for mail.  
• Clerks and carriers do not unnecessarily re-handle unshelved mail transport containers to identify and retrieve delivery point sequence4 (DPS) mail.  

Consequently, the Northern Virginia District used more workhours than necessary to deliver  the mail. Adjusting its operations would increase the Northern Virginia District’s overall efficiency by reducing 103,160 workhours, resulting in savings of more than $3.2 million  annually or about $32 million over 10 years. See Appendix C for additional information  about this issue.  

We recommend the district manager, Northern Virginia District:  

1. Reduce the Northern Virginia District’s workhours by 103,160 to achieve an associated  economic impact of about $32 million over 10 years.
 
2. Require processing facility managers and delivery managers to coordinate, review, and  update all integrated operating plans to ensure mail arrives timely and in the condition necessary to promote office efficiency.

Management’s Comments

Management agreed with the findings, recommendations, and opportunities to capture monetary impact.

In response to recommendation one, management agreed to reduce city carrier office hours. Management’s action plan includes reducing carrier inefficiencies in the office by implementing and monitoring standard operating procedures (SOPs); increasing operational audits for compliance with established best practices; providing additional training for supervisors on managing office time; flexing carrier start times for tours; and improving on-time mail arrival profiles. Management plans to implement action by February 2011. 

Managing Morning and Afternoon Office Operations

Supervisors did not provide sufficient oversight of morning operations. Specifically, the vehicle inspection process was not always efficient. Our observations disclosed that delivery units lost several minutes per day because of carriers searching for vehicles before inspection. Five of the 20 delivery units lost time because parking spaces were unassigned.

In four other delivery units, carriers waited in line to get vehicle keys. Postal Service policy states employees should park vehicles near the dock in assigned spaces identified by individual route numbers. In addition, policy states employees should conduct vehicle inspections promptly after clocking in for the morning. The policy also requires vehicle keys to be located adjacent to time-recording equipment (see Illustration 1).

In addition, supervisors did not always effectively manage afternoon office time at 11 of the 20 delivery units observed. Some carriers spent 10 minutes or more in the office after returning from their routes. Postal Service policy allows a standard 5 minutes for carriers to perform afternoon office duties. We also observed some carriers not clocking directly to “office time” upon returning to the unit in the afternoon, resulting in much of this additional office time” being included in street operations time.

Adjusting its operations would increase the Northern Virginia District’s overall efficiency by reducing approximately 103,160 workhours, resulting in savings of more than $3.2 million annually or about $32 million over 10 years.

USPS OIG Audit Report – City Delivery Efficiency Review – Northern Virginia District