Postal Service

This report examines planned changes in mail service to communities that will be served by a new Dakota Central Area Mail Processing Center in Huron, South Dakota. Area mail processing is meant to cut labor costs by consolidating mail processing--canceling and sorting--functions of many post offices at one facility. The plan for the Dakota Central mail processing facility called for a minor decline in mail service along with some improvements, with a net overall improvement in mail service to the affected communities. GAO found, however, that the consolidation will affect service more adversely than was suggested in the Postal Service's consolidation plan and could result in a net decline in service. The Postal Service did not seek the comments of the local communities or discuss the service aspects of the consolidation with them before initially approving the new facility. Among other things, some postal customers are concerned that reduced service will harm their businesses. GAO believes that the Postal Service needs to review the costs and the benefits of options that could offer the same or better service to the affected communities after the consolidation. Options might include revising or adding routes to the affected communities, adjusting collection schedules, keeping some processing capability in the communities, and establishing separate mail drops for local delivery.

GAO found that: (1) the Service believes that the central area processing facility will improve mail service for most customers; (2) most postal patrons in the affected communities believe the facility will lengthen delivery times and increase some of their costs; (3) the Service used delivery standards rather than actual delivery performance to calculate service changes; (4) some service upgrades that the Service considers in justifying the new facility are not real, because the actual delivery times already meet the new standards; (5) some postal patrons expect to lose business due to the loss of overnight service; (6) postal patrons will lose their present bulk rate discount, and experience a significant increase in their mailing costs; (7) the longer distances involved and frequently adverse weather conditions will delay mail to and from the facility; and (8) postal patrons believe the Service should have consulted them before approving the facility, because the concept was designed for urban environments.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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