U.S. Postal Service
Progress Made in Implementing Mail Processing Realignment Efforts, but Better Integration and Performance Measurement Still Needed Gao ID: GAO-07-1083T July 26, 2007GAO reported in 2005 on major changes in the mailing industry that have reinforced the need for the U.S. Postal Service (USPS) to reduce costs and increase efficiency. To address these changes and become more efficient, USPS is implementing initiatives aimed at realigning its mail processing network. In a follow-up review, GAO recently reported that USPS has made progress in implementing these initiatives, yet challenges such as maintaining delivery standards and addressing stakeholder and community resistance remain. In July 2006, GAO also reported on USPS's progress in improving delivery performance information. This testimony describes (1) the changes that have affected USPS's processing network, (2) GAO's concerns related to USPS's strategy for realigning its mail processing network and implementing its area mail processing consolidations, and (3) GAO's concerns related to USPS's progress in improving delivery performance information. This testimony is based on prior GAO reports.
Several major changes have affected USPS's mail processing operations, including marketplace changes, declining First-Class Mail volume, increased competition, increased mail processing by mailers, automated operations, and population shifts. These changes have led to excess capacity in USPS's mail processing network and variations in productivity among plants. GAO's 2005 report concluded that USPS's strategy for realigning its mail processing network lacked clarity, sufficient transparency and accountability, excluded stakeholder input, and lacked performance measures for results. Since then, USPS has developed several initiatives that are at varying stages of development to address these issues and major changes with an overall goal of reducing costs while maintaining service. In 2007, GAO reported that while USPS has made progress in implementing its realignment initiatives, (1) USPS still did not have answers to important questions about how it intended to realign its network, (2) it remains unclear how various USPS initiatives are individually and collectively contributing to achieving its goals, and (3) the area mail processing (AMP) consolidation initiative, to which USPS attributes most of its progress in reducing excess machine capacity, still presents significant issues. These issues include unclear criteria used in selecting potential AMP consolidations, inconsistent data calculations, limited measures of the effects of changes on delivery performance, and a lack of appropriate stakeholder and public input. USPS is developing new policies to address some of these issues. Nevertheless, questions about USPS's selection criteria continue as USPS has decided not to implement 34 of the 57 potential AMP consolidations it considered in 2005 and 2006. With limited data on the effects of changes, USPS cannot consider actual delivery performance in making consolidation decisions or in evaluating results. GAO reported in 2006 that USPS does not measure and report its delivery performance for most types of mail and that its progress to improve delivery performance information has been slow and inadequate despite numerous USPS and mailer efforts. Postal reform legislation enacted in December 2006 requires USPS to submit a plan to Congress describing its strategy, criteria, and processes for realigning its network and provide performance measures for most types of mail. USPS is preparing its response to these requirements.
GAO-07-1083T, U.S. Postal Service: Progress Made in Implementing Mail Processing Realignment Efforts, but Better Integration and Performance Measurement Still Needed
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Testimony:
Before the Subcommittee on Federal Workforce, Postal Service, and the
District of Columbia, Committee on Oversight and Government Reform,
House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 2:00 p.m. EDT:
Thursday, July 26, 2007:
U.S. Postal Service:
Progress Made in Implementing Mail Processing Realignment Efforts, but
Better Integration and Performance Measurement Still Needed:
Statement of Katherine Siggerud, Director:
Physical Infrastructure Issues:
GAO-07-1083T:
GAO Highlights:
Highlights of GAO-07-1083T, a testimony before the Subcommittee on
Federal Workforce, Postal Service, and the District of Columbia,
Committee on Oversight and Government Reform, House of Representatives
Why GAO Did This Study:
GAO reported in 2005 on major changes in the mailing industry that have
reinforced the need for the U.S. Postal Service (USPS) to reduce costs
and increase efficiency. To address these changes and become more
efficient, USPS is implementing initiatives aimed at realigning its
mail processing network. In a follow-up review, GAO recently reported
that USPS has made progress in implementing these initiatives, yet
challenges such as maintaining delivery standards and addressing
stakeholder and community resistance remain. In July 2006, GAO also
reported on USPS‘s progress in improving delivery performance
information. This testimony describes (1) the changes that have
affected USPS‘s processing network, (2) GAO‘s concerns related to
USPS‘s strategy for realigning its mail processing network and
implementing its area mail processing consolidations, and (3) GAO‘s
concerns related to USPS‘s progress in improving delivery performance
information. This testimony is based on prior GAO reports.
What GAO Found:
Several major changes have affected USPS‘s mail processing operations,
including marketplace changes, declining First-Class Mail volume,
increased competition, increased mail processing by mailers, automated
operations, and population shifts. These changes have led to excess
capacity in USPS‘s mail processing network and variations in
productivity among plants.
GAO‘s 2005 report concluded that USPS‘s strategy for realigning its
mail processing network lacked clarity, sufficient transparency and
accountability, excluded stakeholder input, and lacked performance
measures for results. Since then, USPS has developed several
initiatives that are at varying stages of development to address these
issues and major changes with an overall goal of reducing costs while
maintaining service. In 2007, GAO reported that while USPS has made
progress in implementing its realignment initiatives, (1) USPS still
did not have answers to important questions about how it intended to
realign its network, (2) it remains unclear how various USPS
initiatives are individually and collectively contributing to achieving
its goals, and (3) the area mail processing (AMP) consolidation
initiative, to which USPS attributes most of its progress in reducing
excess machine capacity, still presents significant issues. These
issues include unclear criteria used in selecting potential AMP
consolidations, inconsistent data calculations, limited measures of the
effects of changes on delivery performance, and a lack of appropriate
stakeholder and public input. USPS is developing new policies to
address some of these issues. Nevertheless, questions about USPS‘s
selection criteria continue as USPS has decided not to implement 34 of
the 57 potential AMP consolidations it considered in 2005 and 2006 as
shown in the table below. With limited data on the effects of changes,
USPS cannot consider actual delivery performance in making
consolidation decisions or in evaluating results.
Table: Status of AMP Consolidation Studies in 2005 and 2006:
Status of AMP consolidation: Approved for implementation;
2005: 10;
2006: 2;
Total: 12.
Status of AMP consolidation: Approved for implementation: Implemented;
2005: 9;
2006: 1;
Total: 10.
Status of AMP consolidation: Implementation pending;
2005: 1;
2006: 1;
Total: 2.
Status of AMP consolidation: Decision not to be implemented;
2005: 1;
2006: 33;
Total: 34.
Status of AMP consolidation: Decision still pending;
2005: NA;
2006: 11;
Total: 11.
Status of AMP consolidation: Total AMPs considered;
2005: 11;
2006: 46;
Total: 57.
Source: GAO presentation of USPS data.
[End of table]
GAO reported in 2006 that USPS does not measure and report its delivery
performance for most types of mail and that its progress to improve
delivery performance information has been slow and inadequate despite
numerous USPS and mailer efforts. Postal reform legislation enacted in
December 2006 requires USPS to submit a plan to Congress describing its
strategy, criteria, and processes for realigning its network and
provide performance measures for most types of mail. USPS is preparing
its response to these requirements.
What GAO Recommends:
GAO made recommendations to USPS to enhance the planning,
accountability, and public communications related to its realignment
efforts and to improve its delivery performance measures. USPS‘s
response to the statutory requirements enacted in December 2006 is an
opportunity to address GAO‘s recommendations.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1083T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Katherine Siggerud at
(202) 512-2834 or siggerudk@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to participate in this oversight hearing
for the U.S. Postal Service (USPS). In April 2005, we issued a
report[Footnote 1] that detailed the major changes that have affected
USPS's mail processing and transportation operations and evaluated
USPS's strategy for realigning its network to address these changes. We
recently issued a follow-up report in June 2007,[Footnote 2] which
focused on the initiatives USPS has implemented to realign its network.
We also issued a report[Footnote 3] in July 2006 that discussed our
concerns with USPS's limited delivery performance information, which is
needed to evaluate how USPS's network realignment decisions affect the
quality of delivery service. As requested, my remarks today are based
on these previous GAO reports and will focus on (1) major changes
affecting USPS's mail processing operations that have prompted the need
for network realignment, (2) the concerns we raised in our 2005 and
2007 reports related to USPS's strategy for realigning its mail
processing network and implementing its area mail processing
consolidations, and (3) concerns we raised in our 2006 report on USPS's
progress in improving delivery performance information.
Summary:
As we reported in 2005, several major changes have affected USPS's mail
processing operations. These changes include the following:
* A changing marketplace and shifts in how customers use the mail--USPS
is experiencing a decline in First-Class Mail volume--which declined by
almost 6 percent from fiscal years 2001 through 2006--and has
attributed this decline to how customers use the mail.
* A change in the role of mailers--This is primarily due to the advent
and evolution of USPS's worksharing discounts, which began in 1976.
Postal worksharing activities generally involve mailers preparing,
barcoding, sorting, or transporting mail to qualify for reduced postage
rates.[Footnote 4] These activities allow mail to bypass USPS mail
processing and transportation operations.
* The evolution of USPS's automated equipment and processing and
transportation networks--USPS's use of manual and automated equipment
and the related processing and transportation network have also evolved
over time, resulting in an infrastructure network composed of plants
that are markedly different from one another, which makes it difficult
to standardize operations.
* Shifts in national demographics--USPS facilities may not be optimally
located due to shifts in demographics and changes in transportation.
USPS has stated that a key challenge is to locate processing plants and
employees within efficient reach of most of the population while at the
same time providing universal service to the rest of the nation at a
reasonable cost.
These changes have created excess capacity in USPS's processing network
(i.e., plants, machines, and transportation capacity) and have
contributed to variations in productivity across USPS processing plants
that impede efficiency gains. To address these changes and their
impact, USPS, GAO, the USPS Inspector General, the President's
Commission on the U.S. Postal Service, and the Postal Regulatory
Commission (PRC)[Footnote 5] have all stated that USPS's processing
network needs to be realigned.
In our 2005 report, we concluded that USPS did not have answers to
important questions about how it intended to realign its mail
processing networks. This conclusion still holds true today. In that
report, we evaluated USPS's strategy for realigning its processing
network--Evolutionary Network Development (END), an evolutionary
strategy developed by USPS to realign its processing operations--and
found that this strategy:
* lacked clarity (since USPS announced its intent to realign, it has
developed several different realignment strategies);
* lacked criteria and processes for eliminating excess capacity in its
network;
* excluded stakeholder input from its decision-making processes;
* was not sufficiently transparent and accountable; and:
* lacked performance measures for results.
We recommended that USPS establish a set of criteria for evaluating
realignment decisions, develop a mechanism for informing stakeholders
as decisions are made, and develop a process for implementing these
decisions that includes evaluating and measuring the results as well as
the actual costs and savings resulting from the decisions. We followed
up on the actions USPS has taken related to these recommendations in
our 2007 report and found that although USPS has taken some steps to
improve its planning and evaluation processes, it still has not
clarified the criteria it uses for selecting locations for potential
area mail processing (AMP) consolidations and making decisions on
whether or not to proceed with implementation.
As we stated in our June 2007 report, currently, USPS is implementing
several key initiatives that play central roles in network realignment-
-AMP consolidations, regional distribution center (RDCs) development,
the Flats Sequencing System,[Footnote 6] and surface and air network
development--which are at different stages of implementation. Although
we support USPS's efforts to facilitate the realignment of its
processing network, we have some concerns about how USPS is
implementing these initiatives. First, USPS still does not have answers
to important questions about how it intends to realign its network. For
example, in February 2006, USPS said that it was planning to develop a
network of between 28 and 100 RDCs that would serve as the foundation
for its processing network. In June 2007, we reported that USPS is
reconsidering this network and it is not clear what the future
foundation of the processing network will be. Second, it is not clear
how these initiatives are individually and collectively integrated or
to what extent they are meeting USPS's realignment goals, which
include:
* developing mail processing and transportation networks suited to
current and future operational needs,
* reducing inefficiency and redundancy,
* making operations flexible, and:
* reducing postal costs.
USPS is making changes to its processing network with the aim of
meeting these goals while maintaining current levels of service, but
USPS has yet to develop measurable targets for achieving these goals.
With no measurable targets, it is not apparent how much of an impact
USPS's network realignment initiatives are making toward achieving
these goals. Third, during our review of these initiatives, we also
found several issues with AMP consolidations--the initiative that most
clearly addresses USPS's goal of reducing excess machine capacity.
These issues include USPS's unclear criteria for selecting facilities
and deciding on AMP consolidations, the use of inconsistent data
calculations, limited measures of the effect of changes on delivery
performance, and a lack of appropriate stakeholder and public input
when considering potential AMP consolidations.
USPS is revising its procedural and communication guidelines for AMP
consolidations to address some of these issues, but we continue to have
some concerns, primarily with respect to integrating and measuring
performance related to USPS's network realignment initiatives,
communication procedures, and the transparency of its decision-making.
To address these concerns, in our June 2007 report we recommended that
the Postmaster General:
* strengthen the planning and accountability for USPS's realignment
efforts by ensuring that the Facilities Plan required by the Postal
Accountability and Enhancement Act explains the integration of
realignment initiatives and establishes measurable targets to track
USPS's progress in meeting realignment goals and:
* improve communication with stakeholders by modifying USPS's
procedures to improve the quality of public notices and engagement,
particularly those related to proposed AMP consolidations, and increase
transparency in decision-making.
We reported in 2006 on our concerns related to USPS's limited progress
in improving its delivery performance information, which, as we
reinforced in our 2007 report, is needed to evaluate the effects of its
network realignment decisions. A key concern of some stakeholders who
may be affected by USPS's realignment decisions is whether delivery
service will be negatively affected. Our 2006 report detailed the
limited scope of USPS's delivery performance measures, which cover less
than one-fifth of the mail volume. We also reported on the impediments
to progress and recommended that USPS take actions to provide clear
management commitment and more effective collaboration with mailers to
resolve the impediments to implementing delivery performance
measurement and reporting for all major types of mail. Since our report
was issued, Congress passed postal reform legislation that requires
USPS to submit a plan to Congress describing its strategy, criteria,
and processes for realigning its network and provide the PRC annual
performance reporting for the speed and reliability of delivery of most
types of mail. We believe that USPS's response to these statutory
requirements is an opportunity to address the recommendations from our
three reports.
Several Major Changes Have Affected USPS's Mail Processing Operations
Prompting the Need for Network Realignment:
Several major changes have affected USPS's mail processing and
distribution operations including marketplace changes, such as declines
in First-Class Mail and increased competition, increased automation and
mail processing by mailers, and shifts in population demographics.
Historically, USPS's business model was dependent on revenues from
increasing mail volumes to help cover the costs of its expanding
infrastructure. This model has proven more difficult to sustain because
First-Class Mail volumes--which generate high revenue per piece--are
declining. USPS has attributed the declining First-Class Mail volume to
the impact of electronic diversion as businesses, nonprofit
organizations, governments, and households increasingly automate their
financial transactions and divert correspondence to the Internet. At
the same time as declines in First-Class Mail are taking place,
Standard Mail (primarily advertising mail) volumes are increasing. The
trends for First-Class Mail and Standard Mail, which currently combine
for about 95 percent of mail volumes and 80 percent of revenues,
experienced a historical shift in fiscal year 2005. For the first time,
the volume of Standard Mail exceeded that of First-Class Mail. This
shift has financial implications because First-Class Mail generates the
most revenue and is used to finance most of USPS's institutional
(overhead) costs, while Standard Mail generates less revenue per piece.
It takes about two pieces of Standard Mail to make the same
contribution to institutional costs as one piece of First-Class Mail.
The role of mailers has also changed in large part due to the advent of
USPS's worksharing discounts in 1976 and the evolution of additional
worksharing discounts in subsequent years. Postal worksharing
activities generally involve mailers preparing, barcoding, sorting, or
transporting mail to qualify for reduced postage rates. These
activities allow mailers to bypass some USPS mail processing and
transportation operations. Thus, for example, an activity called
dropshipping allows the mailer a discount for bypassing the plant near
where the sender of the mail is located and transporting the mail
closer to its destination point. Worksharing contributes to excess
capacity in USPS's operations because mail volumes bypass operations
that occur early in USPS's processing network; in some cases, as with
dropshipping, mail volumes bypass entire plants. Also, some plants have
exclusively processed certain types of mail, which has driven up the
cost per piece of those types of mail. In general, by law, each postal
product must cover the costs attributable to its provision plus a
reasonable contribution to cover institutional costs. Consequently,
when a network is dedicated to only one type of mail, that type of mail
must bear the costs of the dedicated network.
USPS's use of manual and automated equipment and the related processing
and distribution network have also evolved over time, resulting in an
infrastructure network composed of plants that are markedly different
from one another. As a result, some plants cannot accommodate some
types of processing equipment because the floor space requirements
differ for manual and automated processing and the plants were not
originally designed to house the advanced technology. In 2005, USPS's
mail processing and distribution infrastructure included plants that
ranged in age from 2 to 72 years old and ranged in size from just over
400 square feet to over 1.5 million square feet; have different
layouts; serve different processing functions; and do not share the
same amount and type of processing equipment.
Additionally, USPS facilities may not be optimally located due to
shifts in demographics and changes in transportation. Most USPS
processing plants are located in eastern states--in areas that
historically have had the largest population. During the 1990s, U.S.
households continued moving West and South, with Nevada and Arizona
ranking as the two fastest growing states in the nation. In 2005, we
reported that the majority of USPS processing plants are located in
states where household growth has not been as rapid as in others. USPS
stated that the challenge it faces is to locate processing plants and
employees within efficient reach of most of the population, while at
the same time providing universal service at a reasonable cost.
Furthermore, as a result of ongoing changes in transportation, most
mail is now moved by highway and air, and some processing plants could
be better located so that major highways and airports would be more
easily accessible. In particular, changes in transportation occurred
after the September 11, 2001, terrorist attacks, when new federal
aviation security restrictions prohibited the transportation of mail
weighing more than 16 ounces on commercial passenger flights. As a
result, the majority of the mail previously transported by commercial
passenger air is now shipped by surface transportation or flown by
FedEx.
These major changes have led to variations in productivity and excess
capacity in USPS's processing network, prompting the need for network
realignment. Average productivity--total pieces processed per hour--
varies among USPS's mail processing and distribution plants, which
indicates that some plants are not processing mail as efficiently as
others. USPS officials have attributed this variation to several
factors, including size of plant as measured by workload, number of
employees, plant layout, and use of nonstandardized processes. In our
2005 report, we found that none of these factors, in isolation, can
explain the variations; rather, it seems that plants with low
productivity exhibit a number of contributing factors.
These major changes have also created excess capacity in USPS's
processing network. According to USPS officials, declining mail volume,
worksharing, and the evolution of mail-processing operations from
manual to automated equipment have led to excess capacity. Excess
capacity created by these trends can be categorized into different
types, including the following:
* excess machine hours, which occur when machines sit idle;
* excess physical infrastructure, which occurs when more square footage
is available for processing mail than is necessary (this may include
entire plants);
* excess transportation capacity, which occurs when trucks are run at
less than full capacity; and:
* excess work hours, which occur when more work hours are used than are
necessary for processing the mail.
Concerns Related to USPS's Strategy for Realigning Its Mail Processing
Network and Implementing its Area Mail Processing Consolidations:
As we reported in 2005, and it continues to be the case today,
important questions remain about how USPS intends to realign its mail
processing network to meet its future needs because USPS does not have
a comprehensive, transparent strategy for realigning its processing
network. Since our 2005 report, USPS has been working on several key
initiatives that play central roles in network realignment: AMP
consolidations, RDC development, the Flats Sequencing System, and
surface and air network development. In 2007 we reported that USPS has
made progress in implementing these initiatives, but we have some
concerns related to the integration and results of these initiatives,
particularly the AMP consolidations.
USPS's Strategy for Realigning Its Mail Processing Network is Still
Unclear:
Our 2005 report concluded that USPS's strategy for realigning has not
been clear because USPS has outlined several seemingly different
strategies, none of which include criteria and processes for
eliminating excess capacity, which may prolong inefficiencies. Also, we
reported that USPS's strategy lacks sufficient transparency and
accountability, excludes stakeholder input, and lacks performance
measures for results. In 2007, we reported that while USPS has made
some improvements, it still is not clear how USPS intends to realign
its mail processing network. The RDC initiative, which USPS referred to
as the foundation of its processing network, is one key area of USPS's
network realignment that is unclear.
In February 2006, USPS testified to the PRC that it would be
undertaking an initiative to develop a network of RDCs to serve as the
foundation of its processing network.[Footnote 7] However, various
developments have caused USPS to reexamine whether it will proceed with
the RDC initiative. RDCs would serve as consolidation centers for mail
of the same shape (i.e., letters, flats, or parcels), which would allow
mailers to bring various classes of mail to one facility and facilitate
the transportation of multiple mail classes on a single transportation
network. When USPS first introduced the concept of RDCs to serve as the
foundation of its processing network, it projected it would need
between 28 and 100 RDCs nationally.
In February 2007, officials told us that they would be reevaluating
processing and transportation network plans in light of the December
2006 Postal Accountability and Enhancement Act, the PRC opinion, and
the planned deployment of new equipment to sort flats. In March 2007,
USPS's Senior Vice President, Operations, told us that USPS is still
determining the structure of its processing network foundation. He said
that similar to the current network, the future network would be
designed around USPS's processing and distribution centers, but how
USPS will make determinations about these facilities appears largely
uncertain.
Mail Processing Realignment Efforts USPS Has Under Way Need Better
Integration and Measurable Targets:
USPS has developed initiatives to facilitate the realignment of its
processing network, but without measurable targets for cost savings or
benefits, it is not clear how these initiatives are meeting its END
goals. The goals of USPS's END include (1) developing mail processing
and transportation networks suited to current and future operational
needs, (2) reducing inefficiency and redundancy, (3) making operations
flexible, and, (4) reducing costs.
The four major initiatives discussed in our June 2007 report are shown
in Table 1.
Table 1: Status and Purpose of Central Realignment Initiatives:
Initiative: Area mail processing consolidations;
Status: In progress;
Purpose: Increase efficiency and use of existing machine capacity by
consolidating mail processing operations,(of the 57 potential
consolidations USPS studied in 2005 and 2006,10 have been implemented
and most of the remaining will not be implemented).
Initiative: Regional distribution center development;
Status: Reconsidering;
Purpose: Provide essential infrastructure for a more efficient
processing network.
Initiative: Flats Sequencing System[A];
Status: Under development;
Purpose: Increase processing efficiency by automating flat mail sorting
to carrier delivery sequence, (deployment of machines for this purpose
is expected between October 2008 and October 2010).
Initiative: Surface and air network development;
Status: Near completion;
Purpose: Improve transportation network flexibility and efficiency, (20
of 23 surface transportation centers have been opened and the remaining
are expected to open in 2007).
Source: GAO presentation of USPS data.
[A] Flat mail includes larger envelopes, catalogs, circulars,
newspapers, and magazines.
[End of table]
USPS has established goals for its END infrastructure realignment and
is making changes to its processing network with the aim of meeting
these goals while still maintaining current levels of service. While
GAO, PRC, and the President's Commission have supported these goals,
USPS has yet to develop measurable targets for achieving them[Footnote
8] It also is unclear how USPS's realignment initiatives are integrated
with each other, that is, how the individual and collective costs and
benefits of these initiatives impact the overall goal of network
realignment. Without measurable targets, the impact of USPS's network
realignment initiatives on achieving these goals is not apparent. For
example, USPS's Senior Vice President, Operations, told us that there
are no actual targets for cost savings in network realignment but an
indicator of success would be the implementation of more AMP
consolidations.
Concerns with the AMP Consolidation Process:
We also raised several issues in our June 2007 report about the AMP
consolidations, in which certain mail-processing operations from
multiple plant locations are consolidated into fewer plant locations.
AMP consolidations are the initiative that most clearly addresses
USPS's reduction of excess machine capacity due to increased
worksharing and declining First-Class Mail volumes, yet the limited
transparency in the AMP consolidation process makes it unclear the
extent to which this initiative is meeting END goals. Many of the
concerns about this lack of transparency in the planning and evaluation
processes are primarily related to the criteria USPS used in selecting
operations at certain facilities as opportunities for AMP
consolidations, the lack of consistent data calculations used in the
decision making and evaluation processes, the lack of the AMP
consolidation's evaluation of impact on service performance, and the
lack of appropriate stakeholder and public input. USPS is taking steps
to address these areas by revising its AMP consolidation guidelines,
but concerns still exist.
AMP consolidations are intended to reduce costs and increase efficiency
by reducing excess machine capacity. One way to reduce excess capacity
is to consolidate mail-processing operations from one or more plants
into another plant(s). This increases the amount of mail processed on
machines and decreases the work hours used in mail processing by
reducing the number of staffed machines. By decreasing the number of
machines used to process mail, AMP consolidations can reduce postal
costs.
In 2005 and 2006, USPS considered 57 studies of opportunities for AMP
consolidations, but has decided not to implement 34 of them. See the
appendix for more detail on the status of these AMP consolidations. As
summarized in table 2, in 2005, USPS considered 11 consolidations, of
which it implemented 9, postponed 1, and did not implement 1.
Table 2: Status of AMP Consolidations Studies in 2005 and 2006:
Status of AMP consolidation: Approved for implementation[A];
2005: 10;
2006: 2;
Total: 12.
Status of AMP consolidation: Implemented;
2005: 9;
2006: 1;
Total: 10.
Status of AMP consolidation: Implementation pending;
2005: 1;
2006: 1;
Total: 2.
Status of AMP consolidation: Decision not to implement;
2005: 1;
2006: 33[B];
Total: 34.
Status of AMP consolidation: Decision still pending;
2005: NA;
2006: 11;
Total: 11.
Status of AMP consolidation: Total AMPs considered;
2005: 11;
2006: 46;
Total: 57.
Source: GAO presentation of USPS data.
[A] USPS originally approved 11 AMP consolidations in 2005 and
subsequently decided not to implement 1.
[B] Decisions not to implement proposed AMP consolidations include 5
consolidations USPS placed on indefinite hold.
[End of table]
In 2006 USPS initiated 46 AMP consolidation studies. As of May 2007, it
had implemented 1 consolidation, approved but not yet implemented 1
consolidation, decided not to implement 33 studies (5 placed on
indefinite hold), was continuing to consider 10 consolidations, and was
still completing the study of 1 consolidation. USPS officials explained
that area officials decided to place 5 AMP consolidation studies on
indefinite hold because of existing delivery service issues in the
areas served by these facilities, which the officials wished to resolve
before considering implementation. USPS officials said that the
remaining 28 of the 33 decisions not to implement the proposed
consolidations were made because, for example, studies had found that
implementation would result in negligible savings or degrade existing
service. USPS anticipates it will make final decisions for the
remaining feasibility studies still under consideration this summer.
Unclear Criteria Used in AMP Consolidation Decisions:
The criteria USPS uses for both selecting locations that may serve as
potential opportunities for AMP consolidations, and deciding whether to
implement a consolidation are unclear. Therefore, USPS may not be
targeting the best opportunities for consolidation. In 2005, USPS used
modeling software that identified 139 sets of locations where
operations could potentially be consolidated. Of these, 46 sets of
locations were deemed feasible for initiating AMP consolidation studies
in 2006; and of these sets, 2 have been approved so far for AMP
consolidations, and 33 have been either rejected or put on hold. In its
December 2006 advisory opinion, PRC questioned not the model itself,
but rather the effectiveness of the model's use in identifying
opportunities for AMP consolidations. PRC's concerns are related to the
fact that the END model does not rely completely on location-specific
data in identifying opportunities for consolidation. Instead, the model
uses some location-specific data in combination with national
productivity averages, which may not adequately target the best
opportunities for consolidations. The USPS Inspector General also
recently reported on USPS's selection process for AMP consolidations.
In addition to having unclear criteria in selecting locations with
potential for consolidating mail processing operations, USPS does not
have specific criteria--such as definitive thresholds or principles--
for deciding whether or not to implement an AMP consolidation after the
study has been completed. USPS's Senior Vice President, Operations,
told us that USPS is considering prioritizing consolidations that are
expected to achieve $1 million or more in cost savings annually.
Inconsistent Data Calculations:
We also reported that USPS did not use consistent data calculations in
determining the impact and cost savings of these consolidations.
Inconsistency in data calculations in the feasibility studies may limit
USPS's ability to identify all of the foreseeable impacts of the
consolidations and to accurately determine the expected cost savings of
the AMP consolidations. The current AMP guidelines do not prescribe
standardized sources for the data used in completing the worksheets,
nor is there a standardized methodology for calculating some data in
the worksheets.
AMP consolidation guidelines require semiannual and annual post
implementation reviews (PIR) of AMP consolidations, which ensure
management's accountability for implementing an AMP plan. USPS's post
implementation review process essentially replicates the AMP
consolidation study process and compares the estimated annual savings
submitted in the approved AMP consolidation study to the actual savings
after 6 months, which is then projected to annualized savings. PIRs are
completed by local managers, approved by area officials, and subject to
final review by headquarters officials.
We found that in some cases, reviewing officials in USPS headquarters
made significant corrections and changes to the draft PIRs that were
submitted for their review, resulting in revised projected annualized
savings that were closer to the original estimates prepared for the AMP
consolidation studies. As shown in table 3, the sum of estimated annual
savings in the nine AMP consolidations approved in 2005, as provided in
the AMP study documents, was about $28 million.[Footnote 9] According
to the initial draft PIRs for these nine consolidations prepared by
USPS officials at the local level 6 months after implementation, the
annualized savings would be about $19 million. During the review of
these PIRs by USPS headquarters, this sum was revised to about $28
million.
Table 3: Semiannual Post Implementation Projected Annualized Savings
Versus Estimated Annualized Savings in AMP Studies Approved in 2005:
Number of PIRs: 9;
Estimated annualized savings in AMP studies: $28,142,829;
Initial post implementation projected annualized savings (prepared by
local officials): $19,017,453;
Revised post implementation projected annualized savings (based on
headquarters review): $28,112,909.
Source: GAO presentation of USPS data.
Note: The headquarters review of the PIRs has been completed for only
three of the nine PIRs, and additional revisions to the projected
annualized savings may be made, but USPS officials provided us with the
most recent data available from their ongoing reviews.
[End of table]
While the differences in the savings from the AMP studies' estimated
annualized savings and the revised PIR projected annualized savings are
generally small, in the interim, drafts of the PIRs showed different
projections before USPS headquarters officials revised them based on
their review. USPS's Senior Vice President, Operations, told us that
the headquarters review has shown that when PIRs have not been
finalized, they do not always account for all of the actual savings
achieved by the AMP consolidation. Another USPS official attributed the
difference in the amounts reported in some PIRs and the revised
projected annualized savings to unexpected events (e.g., changes in
cost elements, such as work hour rates) and differences in the
methodologies used by the individuals calculating the data impact of
the results.
Limited Delivery Performance Measures:
The AMP consolidation process does not evaluate potential impacts to
delivery performance; therefore, USPS cannot determine the actual
impact of AMP consolidations on delivery service. As we reported in
2006, USPS does not measure and report its delivery performance for
most types of mail, and less than one-fifth of total mail volume is
measured.[Footnote 10] While USPS is taking steps toward developing
increased delivery performance measurements, limited mechanisms are
currently in place to determine how AMP consolidations may potentially
impact delivery performance or to evaluate the actual impact after
implementation. USPS has systems in place to measure delivery
performance for some of its First-Class Mail and segments of other
types of mail. However, the External First-Class Measurement System
(EXFC) is limited to single-piece First-Class Mail deposited in
collection boxes in selected areas of the country (see fig. 1). Thus,
some areas included in potential AMP consolidations may not be covered
by the EXFC system; therefore, USPS would not have delivery performance
information for these areas.
Figure 1: Geographic Coverage of Delivery Performance Measurement for
First-Class Mail Deposited in Collection Boxes as Measured by EXFC:
[See PDF for image]
Source: U.S. Postal Service.
Note: Areas covered by EXFC are shaded. Boundaries within states are
for 3-digit ZIP Code areas.
[End of figure]
While the AMP consolidation study does not take delivery performance
into account, it does review impacts on service standards, which are
USPS's official standards for how long it should take to process
different classes of mail between the location where USPS receives the
mail (originating ZIP codes) and its final destination (destinating ZIP
codes). The AMP consolidation study considers whether standards for
different classes of mail will be upgraded (a decrease in the time it
takes mail to travel between certain ZIP codes) or downgraded (an
increase in the time it takes mail to travel between certain ZIP codes)
with implementation of the consolidation. Considering these service
standards provides some insight into the potential impact of the AMP
consolidation on USPS's ability to meet its internal standards;
however, without service performance data or the ability to measure the
AMP consolidation's impacts on delivery performance, it is unclear how
USPS can accurately determine the cost and service impact of its AMP
consolidations.
Lack of Stakeholder and Public Input:
USPS's AMP communication practices do not ensure appropriate
stakeholder engagement in realignment decisions. More specifically, AMP
consolidation communication processes (1) do not provide clear and
useful notification to stakeholders, (2) do not provide for meaningful
public input and lack transparency into the AMP decision-making
process, and (3) provide limited information to the public after USPS
makes AMP consolidation decisions. A town hall meeting is the only
formal requirement for public input during the AMP consolidation
process. Stakeholders and others have criticized the timing of the
meeting, saying it occurs too late in the process, after USPS has
already made major decisions.
AMP consolidations have been taking place since the late 1960s, and
USPS established AMP consolidation guidelines in 1979. However, until
2006, USPS has had no statutory requirement to contact the public
(other than USPS employees) concerning the consolidation of its
operations, unless the consolidation would result in a retail facility
closure. In 1995, prior to the statutory requirement, USPS established
communication guidance requiring the notification of stakeholders when
an AMP consolidation is implemented, and in 2005 this guidance was
updated to require notification when AMP consolidation studies are
initiated. AMP consolidation notification letters sent to stakeholders
were not meaningful and provided little detail. The notification
letters we reviewed were largely form letters, did not simply and
clearly state the type of change or changes being studied, and provided
no range of possible outcomes for the public to understand. Letters
contained jargon with terms that may not be familiar to the public. For
example, they stated that USPS was studying the facility's "total mail
processing," "originating/destinating mail processing," or "originating
mail processing." Also, the letters did not provide the name of the
facility to which operations would be moved so that mailers affected by
the change could plan their operations accordingly. Furthermore, USPS
did not explain to stakeholders that "consolidating both originating
and destinating mail" meant USPS was considering closing the facility,
whereas consolidating "either destinating or originating mail" meant
potential changes only to internal mail processing operations.
AMP guidance requires USPS to "fully consider" both service and "other
impacts on the community." Since 2006, USPS has included a requirement
in its AMP guidance for a town hall meeting to provide a forum to
obtain public input, but there are flaws with that requirement. As
noted in our report, USPS held five town hall meetings that were open
to the public and has held another since our report was issued. USPS
provided little information about the study prior to the meetings--a
series of bullets was posted on a USPS Web site several days prior to
the meetings, and USPS neither publicized an agenda for the meetings
nor employed a neutral party to facilitate them. According to the
guidance, additional information in the form of briefing slides and a
video screening, is not made available to attendees until a meeting
occurs. Then, a USPS official will prepare a summary document after the
meeting that is to be forwarded to USPS headquarters. Only after the
meeting, do the stakeholders and the public have an opportunity to
draft and submit comments to USPS.[Footnote 11]
Additionally, we found that these meetings occur too late in the
decision making process. Public meetings were held after the AMP
consolidation studies were forwarded to USPS headquarters, and after
USPS had gathered and analyzed most of the data, including the data on
customer service impacts. USPS officials could not specifically explain
how stakeholder and public input was used in reaching AMP consolidation
decisions. Furthermore, USPS does not seek input from stakeholders or
the public--including input regarding impact on delivery service--when
evaluating completed AMP consolidations. However, USPS officials told
us that as a matter of practice, USPS provides its employee
organizations with copies of approved AMP studies and completed AMP
evaluations. It is unclear how the information collected at, or
subsequent to, the meetings, factors into consolidation decisions.
Revised AMP Guidelines and New Legislation Are Addressing Some of These
Issues, but Concerns Remain:
Although USPS is revising its AMP consolidation procedural and
communication guidelines to address some of these issues, we continue
to have some concerns. Drafts of these revised procedural guidelines
indicate that the new process will include several changes aimed at
standardizing the AMP consolidation process and the data calculations
used in studying potential consolidations. The use of consistent data
sources should alleviate some of the delays that currently affect the
AMP consolidation process. USPS officials stated that the revised
guidelines are currently scheduled to be released this summer.[Footnote
12] However, we have concerns about the draft guidance because it does
not:
* address USPS's limited use of facility-specific data in identifying
facilities to consider for consolidation,
* identify the criteria USPS uses when deciding to approve an AMP
consolidation, or:
* address USPS's limited ability to measure delivery performance.
While USPS is updating its communication guidance--the AMP
Consolidation Communication Plan and Toolkit--its proposed improvements
would neither substantively improve information provided to
stakeholders and the public, nor improve the public input process.
Proposed improvements would help clarify which stakeholders USPS
notifies but would not improve the content of the notifications.
Furthermore, the draft AMP consolidation guidelines would not provide
for transparency into the AMP consolidation decision-making process to
the extent that Congress has encouraged and others have recommended or
advised by, for example, holding the public meeting earlier or
explaining how USPS uses public input.
To address these concerns, in our recent report we made the following
two recommendations to the Postmaster General:
1. Strengthen the planning and accountability for USPS's realignment
efforts by ensuring that the Facilities Plan required by the Postal
Accountability and Enhancement Act[Footnote 13] includes:
* a discussion of how the various initiatives that will be used in
rationalizing the postal facilities network will be integrated with
each other and:
* the establishment of measurable targets USPS plans on meeting for the
anticipated cost savings and benefits associated with network
rationalization, and the timeline for implementation.
2. Improve the way in which USPS communicates its realignment plans and
proposals with stakeholders, particularly with regard to proposed AMP
consolidations, by taking action to:
* improve public notice by clarifying notification letters,
* improve public engagement by holding the public meeting earlier in
the study, and:
* increase transparency by updating AMP guidelines to explain how
public input is considered in the decision-making process.
In its response to our recent report, USPS generally agreed with our
findings and stated that it will be taking measures to address our
recommendations. USPS commented that its compliance with the Postal
Accountability and Enhancement Act will satisfy our recommendations for
the Postmaster General to ensure that the required Facilities Plan
addresses the integration and performance measurement issues we
identified. We agree that the required Facilities Plan provides an
opportunity for USPS to more fully discuss the integration of its
realignment initiatives and establish measurable targets for meeting
the cost savings and benefits of network rationalization.
Additionally, USPS agreed to improve public notice by providing clear
and simple language detailing the type of change being considered and
forecasting changes to customer services, as well as by soliciting
public input at the initiation of the feasibility study. The public
notice will outline a formal comment period and inform stakeholders
that comments will be addressed later at a public meeting. USPS agreed
to improve public engagement by holding the public meeting earlier in
the AMP process. We agree that this change in timing will improve
USPS's public engagement process as well as the usefulness of public
input in AMP consolidation decisions. The agenda and briefing slides
will be posted on www.usps.com in advance of the public meeting. USPS
also agreed to increase the transparency of the AMP process by adding
information to the AMP guidelines on how USPS uses public input in the
decision-making process. Public input information will be appended to
the AMP proposal provided to the Area Vice President for a decision.
The input will be weighed against the proposal's overall impact on cost
savings and service. If the AMP proposal is approved by the Area Vice
President, it will be forwarded along with the public input information
to the Senior Vice President, Operations. The final report will be
posted on www.usps.com and will summarize the impact of the approved
proposals on savings, service, and other stakeholder concerns.
Progress in Improving Delivery Performance Measures Has Been Slow and
Inadequate:
Our July 2006 report found that USPS does not measure and report its
delivery performance for most types of mail, and less than one-fifth of
total mail volume is measured (see table 4). We also reported that USPS
has made inadequate progress in modernizing its delivery standards and
in implementing delivery performance measurement for all major types of
mail. Our report discussed multiple impediments that have contributed
to USPS's slow progress toward implementing representative measures of
delivery performance for all major types of mail. The most important
impediment was the lack of management commitment and effective
collaboration with the mailing industry to follow up on recommendations
for improvement and to resolve issues between USPS and mailers.
Additional impediments included technological limitations, limited
mailer participation in providing information needed to facilitate
performance measurement, data quality deficiencies, and costs. USPS's
limited progress has left major gaps in each of these areas, despite
numerous recommendations for improvement that have been made in these
areas over the years, including those by USPS-mailer task forces and
working groups, as well as some USPS initiatives to develop delivery
performance measurement. We recommended that USPS take actions to
facilitate greater progress in developing complete delivery performance
information.
Table 4: USPS Measurement and Reporting of Timely Delivery Performance:
Type of mail: Standard Mail;
Mail volume (percent): 47.7;
Mail revenue (percent): 28.4;
Representative measurement: None[A];
Reporting on USPS Web site: None.
Type of mail: First-Class Mail: bulk;
Mail volume (percent): 24.6;
Mail revenue (percent): 23.7;
Representative measurement: None[A];
Reporting on USPS Web site: None.
Type of mail: First-Class Mail: single-piece;
Mail volume (percent): 21.7;
Mail revenue (percent): 30.4;
Representative measurement: Partial;
Reporting on USPS Web site: Partial.
Type of mail: Periodicals;
Mail volume (percent): 4.3;
Mail revenue (percent): 3.2;
Representative measurement: None[A];
Reporting on USPS Web site: None.
Type of mail: Package Services;
Mail volume (percent): 0.6;
Mail revenue (percent): 3.3;
Representative measurement: Partial;
Reporting on USPS Web site: Partial.
Type of mail: Priority Mail;
Mail volume (percent): 0.4;
Mail revenue (percent): 7.0;
Representative measurement: Partial;
Reporting on USPS Web site: Partial.
Type of mail: International Mail;
Mail volume (percent): 0.4;
Mail revenue (percent): 2.6;
Representative measurement: Partial;
Reporting on USPS Web site: None.
Type of mail: Express Mail;
Mail volume (percent): 0.03;
Mail revenue (percent): 1.3;
Representative measurement: Full;
Reporting on USPS Web site: Partial.
Source: GAO analysis of U.S. Postal Service information.
Note: Timely delivery performance is measured based on comparing the
time for USPS to deliver mail against USPS's delivery standards.
Reporting includes material on USPS's Web site. For purposes of this
table, First-Class Mail does not include Priority Mail. Volume and
revenue data are for fiscal year 2005 and do not add up to 100 percent
because they do not include some small and unrelated types of mail.
[A] No representative measure of delivery performance exists for this
mail. Some mailers pay an additional fee to obtain data on the progress
of their mail through USPS's mail processing system. However, these
data are not representative, cover less than 2 percent of total mail
volume, and do not include data on the date of delivery.
[End of table]
While USPS is taking steps toward developing increased delivery
performance measurements, limited mechanisms are currently in place to
determine how AMP consolidations may impact delivery performance or to
evaluate the actual impact after implementation. A key concern of some
stakeholders who may be affected by USPS's realignment decisions is
whether their delivery service will be negatively affected. The Postal
Accountability and Enhancement Act enacted in December 2006 provides
additional opportunities for USPS to address the concerns we raised.
The act requires USPS to establish modern delivery service standards by
December 20, 2007, and implement annual reporting of the speed and
reliability for most types of mail (market-dominant products[Footnote
14]) according to specific requirements to be established by the PRC.
In addition, the act requires USPS to annually report on the quality of
service it provides for each of these products. USPS is in the process
of consulting with mailers, PRC, and the public on how this modernized
system of service standards and measures should be developed. We
believe this process of dialogue and obtaining a broad cross-section of
input is a good start and we look forward to new USPS and PRC
regulations in this area, which are expected later this year.
Mr. Chairman, this concludes my prepared statement. I would be pleased
to respond to any questions that you or the Members of the Subcommittee
may have.
Contact and Acknowledgments:
For further information regarding this statement, please contact
Katherine Siggerud, Director, Physical Infrastructure Issues, at (202)
512-2834 or at siggerudk@gao.gov. Individuals making key contributions
to this statement included Teresa Anderson, Tida Barakat, Tonnyé Conner-
White, Kathy Gilhooly, Kenneth John, Taylor Matheson, and Margaret
McDavid.
[End of section]
Appendix I: Status of USPS 2005 and 2006 AMP Consolidations:
Table 5: Status of AMP Consolidations Approved In 2005 (as of May
2007):
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Bridgeport, CT/ Stamford, CT;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Greensburg, PA/ Pittsburgh, PA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Kinston, NC/ Fayetteville, NC;
Implemented: [Empty];
Implementation postponed: [Empty];
Subsequent decision not to implement: Check.
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Marina, CA/ Los Angeles, CA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Marysville, CA / Sacramento, CA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Mojave, CA/ Bakersfield, CA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Monmouth, NJ / Trenton, NJ & Kilmer, NJ;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Northwest Boston, MA/ Boston, MA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Olympia, WA/Tacoma, WA;
Implemented: [Empty];
Implementation postponed: Check;
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Pasadena, CA/ Santa Clarita, CA &
Industry, CA;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Waterbury, CT/ Southern Connecticut, CT;
Implemented: Check;
Implementation postponed: [Empty];
Subsequent decision not to implement: [Empty].
Facilities involved in consolidation (facility losing operations/
facility gaining operations): Total;
Implemented: 9;
Implementation postponed: 1;
Subsequent decision not to implement: 1.
Source: GAO presentation of USPS data.
[End of table]
Table 6: Status of 46 AMP Consolidations Initiated in 2006 (as of May
2007):
AMP package under review at district or area management: 1; A
MP package under review by headquarters: 10;
Proposed AMP review on hold: 5;
Decision not to implement proposed AMP: 28; AMP approved: 2.
AMP package under review at district or area management: Daytona Beach,
FL/ Mid-FL, FL;
AMP package under review by headquarters: Aberdeen, SD/ Dakotas
Central,SD;
Proposed AMP review on hold: Alamogordo, NM/ El Paso, TX;
Decision not to implement proposed AMP: Beaumont, TX/ Houston, TX;
AMP approved: Newark, NJ/ Kearny, NJ.
AMP package under review by headquarters: Bronx, NY/ Morgan, NY;
Proposed AMP review on hold: Batesville, AR/ Little Rock, AR;
Decision not to implement proposed AMP: Binghamton, NY/ Syracuse, NY;
AMP approved: Saint Petersburg, FL/ Tampa, FL.
AMP package under review by headquarters: Canton, OH/ Akron, OH;
Proposed AMP review on hold: Carbondale, IL/ Saint Louis, MO;
Decision not to implement proposed AMP: Bloomington, IN/ Indianapolis,
IN;
AMP approved: [Empty].
AMP package under review by headquarters: Dallas, TX/ North Texas, TX;
Proposed AMP review on hold: Centralia, IL/ Saint Louis, MO;
Decision not to implement proposed AMP: Bryan, TX/ Houston, TX;
AMP approved: [Empty].
AMP package under review by headquarters: Flint, MI/ NE Metro, MI;
Proposed AMP review on hold: Las Cruces, NM/ El Paso, TX;
Decision not to implement proposed AMP: Burlington, VT/ White River
Jnt, VT;
AMP approved: [Empty].
AMP package under review by headquarters: Jackson, TN/ Memphis, TN;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Cape Cod, MA/ Brockton, MA;
AMP approved: [Empty].
AMP package under review by headquarters: Kansas City, KS/ Kansas City,
MO;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Carroll, IA/ Des Moines, IA;
AMP approved: [Empty].
AMP package under review by headquarters: Oshkosh, WI/ Green Bay, WI;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Cumberland, MD/ Frederick, MD;
AMP approved: [Empty].
AMP package under review by headquarters: Sioux City, IA/ Sioux Falls,
SD;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Fox Valley, IL/ South Suburban,
IL;
AMP approved: [Empty].
AMP package under review by headquarters: Waco, TX/ Fort Worth/Austin,
TX;
Proposed AMP review on hold: [Empty];
Decision not to implement proposed AMP: Gaylord, MI/ Traverse City, MI;
AMP approved: [Empty].
Decision not to implement proposed AMP: Glenwood Springs, CO/ Grand
Junction, CO.
Decision not to implement proposed AMP:Helena, MT/ Great Falls, MT.
Decision not to implement proposed AMP: Hutchinson, KS/ Wichita, KS.
Decision not to implement proposed AMP: LA Crosse, WI/ Rochester, MN.
Decision not to implement proposed AMP: McAllen PO TX/ Corpus Christi,
TX.
Decision not to implement proposed AMP: McCook & N. Platte, NE/ Casper,
WY.
Decision not to implement proposed AMP: Plattsburg, NY/ Albany, NY.
Decision not to implement proposed AMP: Portsmouth, NH/ Manchester, NH.
Decision not to implement proposed AMP: Rockford, IL/ Palatine, IL.
Decision not to implement proposed AMP: Sheridan, WY/ Casper, WY.
Decision not to implement proposed AMP: Springfield, MA/ Hartford, CT.
Decision not to implement proposed AMP: Staten Island, NY/ Brooklyn,
NY.
Decision not to implement proposed AMP: Twin Falls, ID/ Boise, ID.
Decision not to implement proposed AMP: Utica, NY/ Syracuse or Albany,
NY.
Decision not to implement proposed AMP: Watertown, NY/ Syracuse, NY.
Decision not to implement proposed AMP: Wheatland, WY/ Cheyenne, WY.
Decision not to implement proposed AMP: Yakima, WA/ Pasco, WA.
Decision not to implement proposed AMP: Zanesville, OH/ Columbus, OH.
Source: GAO presentation of USPS data.
Note: This table includes the facilities involved in proposed
consolidations, both the facility losing operations and the facility
gaining operations.
[End of table]
FOOTNOTES
[1] GAO, U.S. Postal Service: The Service's Strategy for Realigning Its
Mail Processing Infrastructure Lacks Clarity, Criteria, and
Accountability, GAO-05-261 (Washington, D.C.: Apr. 8, 2005).
[2] GAO, U.S. Postal Service: Mail Processing Realignment Efforts Under
Way Need Better Integration and Explanation, GAO-07-717 (Washington,
D.C.: June 21, 2007).
[3] GAO, U.S. Postal Service: Delivery Performance Standards,
Measurement, and Reporting Need Improvement, GAO-06-733 (Washington,
D.C.: July 27, 2006).
[4] Key worksharing activities include (1) barcoding and preparing mail
so USPS can sort it on automated equipment; (2) presorting mail, such
as by ZIP code or specific delivery location; and (3) entering mail
closer to destination, commonly referred to its destination entry or
dropshipping.
[5] The Postal Regulatory Commission was previously named the Postal
Rate Commission. Section 604 of the Postal Accountability and
Enhancement Act (Pub. L. No. 109-435), enacted on December 20, 2006,
redesignated the Postal Rate Commission as the Postal Regulatory
Commission.
[6] Flat mail includes larger envelopes, catalogs, circulars,
newspapers, and magazines.
[7] In February 2006 USPS, sought an advisory opinion from PRC on
anticipated changes in the application of current service standards
that may result from a systemwide review and realignment of its mail
processing and transportation networks, and PRC issued its advisory
opinion in December 2006.
[8] In July 2003, the President's Commission provided recommendations
on ensuring efficient USPS operations, while minimizing financial
exposure to the American taxpayer. These recommendations supported
USPS's realignment of its processing network.
[9] USPS headquarters officials also revised the AMP studies' estimated
annual savings for two consolidations after the consolidations were
approved to eliminate duplicate savings, which reduced the AMP studies'
total estimated annual savings by $2.8 million. We did not include this
revised AMP estimate in the table because we wanted all the data in the
table to be from consistent sources.
[10] GAO-06-733.
[11] For the five meetings that were held, USPS afforded stakeholders
and the public 5 days to provide comments. USPS has since increased the
comment period to 15 days.
[12] USPS plans on providing a draft of the guidelines to employee
unions for their review. Unions are allowed 60 to 90 days for review
and comment.
[13] The Postal Accountability and Enhancement Act requires USPS to
develop a Facilities Plan that includes a strategy for how USPS intends
to rationalize the postal facilities network and remove excess
processing capacity and space from the network and the process for
engaging policymakers and the public in related decisions.
[14] The Postal Accountability and Enhancement Act defines market-
dominant products to include: First-Class Mail letters and sealed
parcels, First-Class Mail cards, periodicals, Standard Mail, single-
piece parcel post, media mail, bound printed matter, library mail,
special services, and single-piece international mail.
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