U.S. Postal Service
Mail Processing Network Initiatives Progressing, and Guidance for Consolidating Area Mail Processing Operations Being Followed Gao ID: GAO-10-731 June 16, 2010Deteriorating financial conditions and declining mail volume have reinforced the need for the U.S. Postal Service (USPS) to increase operational efficiency and reduce expenses in its mail processing network. This network consists of interdependent functions in nearly 600 facilities. USPS developed several initiatives to reduce costs and increase efficiency; however, moving forward on some initiatives has been challenging because of the complexities involved in consolidating operations. In response to a conference report directive, GAO assessed (1) the overall status and results of USPS's efforts to realign its mail processing network and (2) the extent to which USPS has consistently followed its guidance and applied these criteria in reviewing Area Mail Processing (AMP) proposals for consolidation since the beginning of fiscal year 2009. To conduct this assessment, GAO reviewed USPS's Network Plan, area mail processing consolidation guidance and proposals as well as other documents; compared USPS's actions related to consolidation of area mail processing facilities with its guidance, and interviewed officials from USPS, the USPS Office of Inspector General, and employee organizations. GAO provided USPS with a draft of this report for comment. In response, USPS provided technical comments that were incorporated where appropriate.
USPS has realigned parts of its mail processing network since the beginning of fiscal year 2009 and continues to seek additional opportunities to achieve its goal of creating an efficient and flexible network and realize cost savings. Specifically, USPS: (1) eliminated all functions of the Airport Mail Centers, closed 9 of these facilities, and now uses the remaining 12 for other purposes, resulting in a realized cost savings of about $12.2 million in fiscal year 2009; (2) reorganized the functions of the 21 Bulk Mail Centers into newly developed Network Distribution Centers, resulting in a realized cost savings of about $17.7 million in fiscal year 2009; and (3) implemented 23 proposals to consolidate AMP operations and facilities and approved another 6 AMP consolidation proposals. USPS estimated an annual cost savings of about $98.5 million for the 29 approved and implemented AMP proposals. Additionally, USPS officials stated that they plan to integrate the Surface Transfer Center functions into the Network Distribution Center network to further eliminate redundancy in transporting mail. USPS has developed specific program targets for the ongoing reorganization efforts of the Network Distribution Centers and estimated a cost savings of about $233.8 million for fiscal years 2010 and 2011 from reduction in work hours and transportation costs. On the basis of GAO's analysis of 32 AMP proposals that were implemented, approved, or not approved since the beginning of fiscal year 2009, USPS has followed its realignment guidance by completing each step of the process and consistently applying its criteria in its reviews. GAO's analysis found that it took about 6 months on average--a month more than USPS's target of 5 months--to complete the review process from initiating an AMP proposal to making a decision. USPS officials noted the importance of the AMP decisions and the need to sometimes take longer than what the guidance suggests to ensure the correct decision. GAO also found that USPS consistently notified stakeholders when key steps of the AMP process were completed, such as when an AMP proposal was initiated, or public meetings were held. For each of the AMP proposals that GAO reviewed, USPS also consistently evaluated its four criteria related to AMP consolidations: (1) impacts on the service standards for all classes of mail, (2) issues important to local customers, (3) impacts to USPS staffing, and (4) savings and costs associated with moving mail processing operations.
GAO-10-731, U.S. Postal Service: Mail Processing Network Initiatives Progressing, and Guidance for Consolidating Area Mail Processing Operations Being Followed
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
June 2010:
U.S. Postal Service:
Mail Processing Network Initiatives Progressing, and Guidance for
Consolidating Area Mail Processing Operations Being Followed:
GAO-10-731:
GAO Highlights:
Highlights of GAO-10-731, a report to congressional committees.
Why GAO Did This Study:
Deteriorating financial conditions and declining mail volume have
reinforced the need for the U.S. Postal Service (USPS) to increase
operational efficiency and reduce expenses in its mail processing
network. This network consists of interdependent functions in nearly
600 facilities. USPS developed several initiatives to reduce costs and
increase efficiency; however, moving forward on some initiatives has
been challenging because of the complexities involved in consolidating
operations. In response to a conference report directive, GAO assessed
(1) the overall status and results of USPS‘s efforts to realign its
mail processing network and (2) the extent to which USPS has
consistently followed its guidance and applied these criteria in
reviewing Area Mail Processing (AMP) proposals for consolidation since
the beginning of fiscal year 2009. To conduct this assessment, GAO
reviewed USPS‘s Network Plan, area mail processing consolidation
guidance and proposals as well as other documents; compared USPS‘s
actions related to consolidation of area mail processing facilities
with its guidance, and interviewed officials from USPS, the USPS
Office of Inspector General, and employee organizations.
GAO provided USPS with a draft of this report for comment. In
response, USPS provided technical comments that were incorporated
where appropriate.
What GAO Found:
USPS has realigned parts of its mail processing network since the
beginning of fiscal year 2009 and continues to seek additional
opportunities to achieve its goal of creating an efficient and
flexible network and realize cost savings. Specifically, USPS:
* eliminated all functions of the Airport Mail Centers, closed 9 of
these facilities, and now uses the remaining 12 for other purposes,
resulting in a realized cost savings of about $12.2 million in fiscal
year 2009;
* reorganized the functions of the 21 Bulk Mail Centers into newly
developed Network Distribution Centers, resulting in a realized cost
savings of about $17.7 million in fiscal year 2009; and;
* implemented 23 proposals to consolidate AMP operations and
facilities and approved another 6 AMP consolidation proposals. USPS
estimated an annual cost savings of about $98.5 million for the 29
approved and implemented AMP proposals.
Additionally, USPS officials stated that they plan to integrate the
Surface Transfer Center functions into the Network Distribution Center
network to further eliminate redundancy in transporting mail. USPS has
developed specific program targets for the ongoing reorganization
efforts of the Network Distribution Centers and estimated a cost
savings of about $233.8 million for fiscal years 2010 and 2011 from
reduction in work hours and transportation costs.
On the basis of GAO‘s analysis of 32 AMP proposals that were
implemented, approved, or not approved since the beginning of fiscal
year 2009, USPS has followed its realignment guidance by completing
each step of the process and consistently applying its criteria in its
reviews. GAO‘s analysis found that it took about 6 months on average”a
month more than USPS‘s target of 5 months”to complete the review
process from initiating an AMP proposal to making a decision. USPS
officials noted the importance of the AMP decisions and the need to
sometimes take longer than what the guidance suggests to ensure the
correct decision. GAO also found that USPS consistently notified
stakeholders when key steps of the AMP process were completed, such as
when an AMP proposal was initiated, or public meetings were held. For
each of the AMP proposals that GAO reviewed, USPS also consistently
evaluated its four criteria related to AMP consolidations: (1) impacts
on the service standards for all classes of mail, (2) issues important
to local customers, (3) impacts to USPS staffing, and (4) savings and
costs associated with moving mail processing operations.
View [hyperlink, http://www.gao.gov/products/GAO-10-731] or key
components. For more information, contact Phillip Herr at (202) 512-
2834 or herrp@gao.gov.
[End of section]
Contents:
Letter:
Background:
USPS Has Realigned Part of Its Mail Processing Network and Has
Estimated Cost Savings:
USPS Has Followed Its Guidance and Consistently Applied Criteria in
Consolidating Its AMP Facilities:
Agency Comments:
Appendix I: Area Mail Processing Proposals:
Appendix II: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Status and Results of USPS Mail Processing Network
Initiatives from October 2008 through March 2010:
Table 2: Facilities Involved in AMP Proposals Under Review by USPS as
of March 2010:
Table 3: Facilities Involved in AMP Proposals USPS Approved from
October 2008 through March 2010:
Figures:
Figure 1: Simplified Mail Flow through the National Infrastructure:
Figure 2: Keys Steps of USPS's AMP Process:
Figure 3: Processing Time for AMP Proposals We Reviewed (October 2008-
March 2010):
Abbreviations:
AMC: Airport Mail Center:
AMP: Area Mail Processing:
BMC: Bulk Mail Center:
CSMPC: Customer Service Mail Processing Center:
MPA: Mail Processing Annex:
NDC: Network Distribution Center:
OIG: Office of Inspector General:
P&DC: Processing and Distribution Center:
P&DF: Processing and Distribution Facility:
PIR: postimplementation review:
PO: Post Office:
SCF: Sectional Center Facility:
STC: Surface Transfer Center:
SVP: Senior Vice President:
USPS: United States Postal Service:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
June 16, 2010:
The Honorable Richard J. Durbin:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Subcommittee on Financial Services and General Government:
Committee on Appropriations:
United States Senate:
The Honorable José E. Serrano:
Chairman:
The Honorable Jo Ann Emerson:
Ranking Member:
Subcommittee on Financial Services and General Government:
Committee on Appropriations:
House of Representatives:
While the U.S. Postal Service (USPS) generated $68.1 billion in
revenue in fiscal year 2009, deteriorating financial conditions and
declining mail volume have reinforced the need to increase operational
efficiency and reduce expenses in its mail processing network. The
network consists of interdependent functions and operations in nearly
600 facilities with various equipment that sorts mail and prepares it
for transportation and delivery. From fiscal years 2007 through 2009,
the economic downturn and changing uses of the mail contributed to
decreasing USPS mail volumes of 36 billion pieces (about 17 percent),
which amounted to a loss of $12 billion. During that time, USPS also
eliminated about $1.3 billion in FY 2008 and $6 billion in FY 2009 in
operating expenses through actions such as instituting a nationwide
hiring freeze, cutting work hours, and halting construction of new
postal facilities. Most recently, total mail volume for the first
quarter of fiscal year 2010 was down almost 4.5 billion pieces--a
decrease of almost 9 percent over last year--and USPS does not expect
total mail volume to return to its former level when the economy
recovers from the recent downturn.
USPS has made realigning its mail processing network an ongoing effort
and has developed several initiatives to reduce costs and increase
efficiency. One such initiative, Area Mail Processing (AMP), was
designed to consolidate operations at facilities with excess machine
capacity to improve operational efficiency and service. However,
moving forward on the AMP initiative has been challenging because of
the complexities involved in consolidating operations, as well as
stakeholder resistance to consolidating operations and closing
facilities. In 2005 and 2007, we issued reports that evaluated USPS's
network plans and included recommendations for improvement.[Footnote
1] In 2008, we reported on the progress USPS had made toward
implementing our previous recommendations on realigning its mail
processing network.[Footnote 2] This report responds to a directive in
a conference report for GAO to report to the House and Senate
Committees on Appropriations and assesses (1) the overall status and
results of USPS's efforts to realign its mail processing network and
(2) the extent to which the USPS has consistently followed its
guidance and applied these criteria in reviewing its AMP facilities
for consolidation since the beginning of fiscal year 2009.
To determine the status and results of USPS's efforts to realign its
mail processing network, we reviewed the USPS Office of Inspector
General (OIG) January 2010 report on network initiatives,[Footnote 3]
USPS's updated 2009 Network Plan, other USPS documents, and prior GAO
reports. We also interviewed officials from USPS and its OIG to
discuss overall progress in USPS's mail processing initiatives. To
assess the extent to which USPS has consistently followed its guidance
and applied criteria in consolidating its AMP operations and
facilities since the beginning of fiscal year 2009, we reviewed USPS's
AMP Handbook PO-408 and its updated December 2009 AMP Communication
Plan. We focused on the AMP initiative because its total number of
facilities and mail processing operations are considerably larger and
more extensive than the operations of USPS's other network
initiatives. We reviewed files maintained in USPS headquarters for 32
AMP proposals that were approved, implemented, or not approved from
October 2008 to March 2010 to determine whether the USPS had
consistently followed its established process and criteria in
reviewing AMP proposals for consolidation. We did not include AMP
proposals that were terminated or put on hold since they did not fully
go through the process. We collected key data from the AMP files
maintained in USPS headquarters and analyzed the extent to which USPS
followed the decision-making phase of the process--that is, the period
from when a study of the potential for consolidation is initiated to
when the final decision is made as to whether a consolidation will
occur. We also determined whether USPS achieved its timeliness goal
for completing the decision-making process in 5 months, as established
in the AMP Handbook PO-408. It was outside the scope of this work to
assess the timeliness of the interim steps of the process that are
completed by local and regional management.[Footnote 4] We also
interviewed representatives from the American Postal Workers Union and
National Mail Handlers Union to obtain their perspective on the AMP
process. We conducted this performance audit from March 2010 to June
2010, in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
Background:
USPS's mail processing network consists of multiple facilities with
different functions, as shown in a simplified version of this complex
network in figure 1. USPS can receive mail into its processing network
from different sources such as mail carriers, post offices, and
mailing companies. Once USPS receives mail from the public and
commercial entities, it processes and distributes the mail on
automated equipment that cancels stamps and sorts bar coded mail. Once
mail distribution has been completed by other operations, the mail is
transported between processing and distribution facilities. Depending
on the mail shape and classification, USPS processes the mail through
different types of facilities that perform various functions.[Footnote
5] While mail is processed mainly through these facilities, mail
processing operations also occur in other facilities, such as at
annexes that are temporary facilities used as overflow for mail
processing.
Figure 1: Simplified Mail Flow through the National Infrastructure:
[Refer to PDF for image: illustration]
Originating mail:
Carrier collection:
Mail is picked up from homes, businesses, and mailboxes.
Window mail:
Collected at Post Office or branch.
Alternate access:
Click and ship contract postal unit.
All of the preceding is sent to: Post Office.
Bulk Mail Entry Unit or Detached Entry Unit:
Commercial mail.
From Post Office and Bulk Mail Entry Unit or Detached Entry Unit to:
Mail Processing Network:
Processing and Distribution Center:
Processes and dispatches incoming and outgoing mail for a designated
service area (268 facilities nationwide).
Network Distribution Center:
Processes and distributes Standard MailŪ and parcels (21 facilities
nationwide).
Surface Transfer Center:
Consolidates containers from multiple facilities to maximize
transportation utilization (20 facilities nationwide).
Logistics and Distribution Center:
Processes multiple types of mail, including Priority MailŪ (14
facilities nationwide).
Within the Mail Processing Network, the preceding three centers
forward mail to:
Processing and Distribution Center.
Destinating Mail:
From the Processing and Distribution Center and Bulk Mail Entry Unit
or Detached Entry Unit, to:
Post Office:
Carrier Delivery: mail is delivered.
Sources: GAO and USPS.
Note: Originating mail refers to outgoing and local mail that enters
the point of origin for mail processing. Local mail remains within the
facility and is combined with destinating mail from other origin
facilities. Destinating mail refers to mail arriving at point of entry
for distribution and dispatch to a post office for delivery.
[End of figure]
In its June 2008 Network Plan, USPS determined that it will reexamine
its mail processing network on an ongoing basis given changes in mail
volume and outlined several initiatives to improve management of its
mail processing operations, retail operations, and workforce to
increase efficiency and reduce costs. With regard to its mail
processing operations specifically, USPS identified three major
initiatives to improve efficiency: (1) closing Airport Mail Center
(AMC) operations, (2) transforming the Bulk Mail Center (BMC) network,
and (3) consolidating AMP operations. USPS's Network Plan also
included criteria for evaluating decisions, the three most important
of which were cost, service, and capacity. In September 2008, we
reported that USPS took steps to address our prior recommendations to
strengthen planning and accountability for its network initiatives,
which was important as USPS began implementing them.[Footnote 6]
However, we also found limited information on performance targets or
on the costs and savings attributable to USPS's various mail
processing network initiatives.
In the case of consolidating AMP operations, USPS revised its guidance
on the process for AMP consolidations in March 2008. The revised
guidance included key steps and time frames associated with them, as
well as criteria to consider when making a decision to consolidate
operations. The AMP Handbook does not provide guidance regarding how
to identify potential opportunities for consolidation. In January
2010, the USPS OIG recommended that the Vice President of Network
Operations develop and document specific criteria to identify
consolidation opportunities, and USPS management agreed with this
recommendation. In December 2009, USPS also updated the AMP
Communication Plan, which supplements the AMP guidelines and provides
specific guidance on communicating with stakeholders.
USPS Has Realigned Part of Its Mail Processing Network and Has
Estimated Cost Savings:
USPS has realigned parts of its mail processing network and continues
to seek additional opportunities to achieve its goal of creating an
efficient and flexible network. For fiscal year 2009, USPS realized a
cost savings of almost $30 million from eliminating all AMC operating
functions and closing nine of these facilities and reorganizing the
functions of the BMC to the Network Distribution Centers (NDC). Table
1 shows the status of USPS's three major processing network
initiatives intended to lower costs and achieve savings by reducing
excess capacity and fuel consumption.
Table 1: Status and Results of USPS Mail Processing Network
Initiatives from October 2008 through March 2010:
Network initiatives: Elimination of AMC operating functions;
Status:
* Eliminated all functions of AMC;
* Closed 9 AMC facilities;
* 12 AMC facilities remain open and perform other functions;
Results:
* In FY 2009, about $12.2 million realized in cost savings;
* $113.9 million in total cost savings from fiscal year 2007 through
fiscal year 2009.
Network initiatives: Reorganization of BMC functions to NDC;
Status:
* Reorganized functions of BMC network, including renaming it, into
NDC network to reflect the type of operations at the facilities;
* 21 NDCs in operation;
Results:
* In FY 2009, about $17.7 million realized in cost savings;
* USPS projects $233.8 million in cost savings in fiscal years 2010
and 2011.
Network initiatives: Consolidation of AMP operations and facilities;
Status:
* 23 AMP consolidations implemented, including 1 Processing &
Distribution Center closed (Kansas City, KS);
* 6 AMP approved for consolidation, but not yet fully implemented;
* 3 AMP consolidations not approved;
* 9 AMP consolidations on hold or study halted;
Results:
* USPS expects an annual cost savings of about $98.5 million for the
29 approved and implemented AMP consolidations.
Source: GAO analysis of USPS data.
[End of table]
Specific steps taken on the three major mail processing network
initiatives are as follows:
* Elimination of AMC operating functions. Of its three major network
initiatives, USPS has taken the most action by eliminating the AMC
function and closing 9 AMC facilities. In the past decade, USPS has
closed 68 of 80 AMC facilities. Located on airport property, AMC
facilities primarily processed mail to expedite its transfer, to and
from, up to 55 different commercial passenger airlines. Over time,
USPS reduced the number of commercial airlines transporting mail from
55 to 7 and, from 2001 to 2007, the volume of mail transported by
commercial airlines decreased by over 87 percent. At the same time,
USPS contracted with air freight carriers to transport most of the
mail requiring air transfer. In response, many AMC facilities made use
of the available processing space by taking on additional processing
functions typically handled by local processing and distribution
centers (P&DCs), such as carrier and retail operations. In 2006, in an
effort to eliminate redundancy and reduce costs, USPS began
transferring functions performed at AMCs to nearby P&DCs or
outsourcing these operations and, in September 2008, we reported that
USPS estimated a targeted total savings of $117 million for closing
these AMC facilities. Since our 2008 report, USPS has closed 9 AMC
facilities, avoiding an estimated $12.2 million in costs. It has also
revised the total cost savings to $113 million resulting from
eliminating the AMC function and closing facilities, from fiscal year
2007 to fiscal year 2009. USPS officials told us that they plan to
reclassify the 12 remaining facilities and determine whether some of
them can be closed.
* Reorganization of BMC functions into NDC Network. USPS has
reorganized the functions of its 21 BMCs into an NDC network with
expanded functions that more efficiently use long-haul transportation
and better align work hours with workload, according to the 2009
Updated Network Plan. Before the reorganization, all BMCs performed
the same functions of processing local, destinating, and originating
mail (e.g., Standard MailŪ, Periodicals, and Package Services).
[Footnote 7] In fiscal year 2009, USPS reorganized the BMC network,
including renaming the facilities as NDC, to reflect the type of
operations that are occurring at the facilities, according to USPS
officials. The NDC network is divided into three tiers of facilities
with different distribution and processing roles:
* Tier 1 NDC facilities process local and destinating mail;
* Tier 2 facilities process local, destinating, and originating mail;
and:
* Tier 3 facilities handle Tier 2 functions and consolidate less-than-
truckload volumes of mail from Tier 2 facilities.
As a result of the reorganization, USPS reduced the number of
facilities processing originating mail from 21 to 10; the remaining 11
facilities continue to process local and destinating mail.
According to officials, USPS completed the reorganization of the BMC
functions to NDC in March 2010 and plans to further integrate other
mail processing operations to NDC. USPS realized a cost savings of
about $17.7 million for fiscal year 2009, with a projected cost
savings of about $233.8 million from additional reorganization in
fiscal years 2010 and 2011. According to officials, USPS also plans to
integrate its Surface Transfer Center (STC) functions into the NDC
network to further eliminate redundancy and move all mail traveling
the same route through the same facilities.[Footnote 8] USPS officials
told us they are currently identifying and assessing opportunities for
consolidating STC functions into the NDC network; however, USPS has
not established a definitive timeline as to when the functions of the
STC are to be integrated into the NDC network because such integration
depends on future mail volumes, space requirements and space
availability, and necessary equipment.
* Consolidation of AMP operations and facilities. As shown in table 1,
USPS has continued to initiate, review, and make decisions on AMP
proposals to consolidate its operations and facilities. AMP proposals
are intended to reduce costs and increase efficiency by making better
use of excess capacity or underused resources, primarily at USPS's
P&DC facilities; the AMP proposals consist of consolidating all
originating, destinating, or both types of operations, from one mail
processing facility that downsizes its mail processing operations to
other facilities nearby that gains the processing operations. While
local and regional USPS management is responsible for conducting a
feasibility study and developing an AMP proposal, USPS headquarters
approves or disapproves the AMP proposal. Upon an approval from USPS
headquarters, local and regional USPS management implements the
consolidation of processing operations identified in an AMP proposal.
According to USPS officials, the AMP initiative is an ongoing effort
to identify opportunities to achieve efficiencies and, as such, USPS
has not developed a program target for annual savings from AMP
consolidations. As of March 2010, USPS was studying or reviewing 24
additional AMP proposals. (See appendix I for a list of the AMP
proposals under review.)
USPS Has Followed Its Guidance and Consistently Applied Criteria in
Consolidating Its AMP Facilities:
USPS Has Followed Its Process for Consolidating Area Mail Facilities:
On the basis of our analysis of 32 AMP proposals that were
implemented, approved, or not approved since October 2008, USPS has
followed the key steps in the AMP process. (See app. I for a list of
the AMP proposals we reviewed.) As shown in figure 2, USPS has
developed key steps for the AMP process, and it has established an
overall goal of making an AMP decision within 5 months of the study
being initiated. Our analysis found that USPS completed each step of
the AMP process. It took about 6 months on average to complete the
review process from initiating an AMP proposal to making a decision on
27 AMP proposals we analyzed.[Footnote 9]
Figure 2: Keys Steps of USPS's AMP Process:
[Refer to PDF for image: illustration]
Key step: Feasibility study;
* Regional USPS management notifies Senior Vice President (SVP) of
Operations in USPS headquarters about intention to conduct a
feasibility study of an AMP proposal.
* Stakeholders are notified of the intent to conduct a feasibility
study of an AMP proposal.
* Within 2 months, local USPS management completes the feasibility
study of an AMP proposal and submits it to the regional USPS
management, along with required documentation.
Goal for completion time: 2 months.
Key step: Public input and management review;
* Within 45 days after completing and submitting a feasibility study,
local USPS management must conduct a public input meeting.
* After the public input meeting, 15 days are provided to the public
to submit additional written comments and for the local USPS
management to summarize the meeting.
* Concurrently, after the feasibility study of an AMP proposal is
submitted, regional and headquarters management conducts a 60-day
review.
Goal for completion time: 2 months.
Key step: AMP proposal and approval;
* After the receipt of public comments and the feasibility study,
regional management decides on an AMP proposal and submits it to
headquarters. Generally, this step should be completed within 2 weeks.
* SVP Operations in USPS headquarters makes final decision to approve
or disapprove an AMP proposal within 2 weeks of receiving it from
regional management.
* Stakeholders are notified of the decision prior to implementation of
an approved AMP.
Goal for completion time: 1 month.
Key step: Postimplementation review;
* Regional management must conduct two postimplementation reviews
(PIRs) to assess whether planned savings, work hours, and levels of
services are met. The first PIR covers the first 6 months after
implementation, and the final PIR covers the first year after
implementation.
Source: GAO analysis of USPS data.
[End of figure]
As shown in figure 3, 4 of the 27 AMP proposals we reviewed were
completed in less than 5 months, while others took longer because of
various factors, such as resolving conflicting interests from
stakeholders and staffing issues. According to USPS officials, the
time frames are goals to ensure the process moves forward, but USPS
will take the time necessary to ensure that any issues that arise from
an AMP proposal are resolved and appropriate decisions are made, even
if doing so means going beyond the targeted 5-month time frame. For
example, while USPS headquarters completed its review in June 2009 of
consolidating the Dallas, TX, P&DC into the North Texas P&DC, the AMP
proposal was not approved until December 2009 partially because the
OIG was concurrently reviewing the AMP proposal in response to a
congressional request. Many of the interim steps in the process
conducted by the local and regional management also have time frames
associated with them, such as studying the feasibility of an AMP
proposal within a 2-month period. However, according to officials,
USPS does not centrally track all the dates associated with the
interim steps in the process because reviewing AMP proposals is an
ongoing, iterative process with some steps occurring concurrently
among local and regional USPS management and headquarters.
Figure 3: Processing Time for AMP Proposals We Reviewed (October 2008-
March 2010):
[Refer to PDF for image: horizontal bar graph]
Goal for completing AMP review time: 5 months.
AMP proposal: Dallas P&DC, TX;
Processing time: 9.2 months.
AMP proposal: Wilkes-Barre P&DF, PA;
Processing time: 8.1 months.
AMP proposal: Palatine P&DC, IL;
Processing time: 7.9 months.
AMP proposal: Binghamton P&DF, NY;
Processing time: 7.9 months.
AMP proposal: Hattiesburg CSPMC, MS;
Processing time: 7.8 months.
AMP proposal: Athens CSPMC, GA;
Processing time: 7.8 months.
AMP proposal: Oxnard P&DF, CA;
Processing time: 7.5 months.
AMP proposal: Newark P&DC, NJ;
Processing time: 7.0 months.
AMP proposal: Mansfield P&DF, OH;
Processing time: 6.9 months.
AMP proposal: Long Beach P&DC, CA;
Processing time: 6.7 months.
AMP proposal: South Florida P&DC, FL;
Processing time: 6.6 months.
AMP proposal: Winchester SCF, VA;
Processing time: 6.2 months.
AMP proposal: Portsmouth P&DF, NH;
Processing time: 6.2 months.
AMP proposal: New Castle P&DF, PA;
Processing time: 6.2 months.
AMP proposal: Charlottesville P&DF, VA;
Processing time: 6.0 months.
AMP proposal: Watertown PO, NY;
Processing time: 6.0 months.
AMP proposal: Queens P&DC, NY;
Processing time: 5.8 months.
AMP proposal: Frederick P&DF, MD;
Processing time: 5.7 months.
AMP proposal: Marysville P&DF, CA;
Processing time: 5.7 months.
AMP proposal: Kinston P&DF, NC;
Processing time: 5.6 months.
AMP proposal: Hickory P&DF, NC;
Processing time: 5.6 months.
AMP proposal: Cape Cod P&DF, MA;
Processing time: 5.6 months.
AMP proposal: Bloomington MPA, IN;
Processing time: 5.3 months.
AMP proposal: Western Nassau P&DC, NY;
Processing time: 4.9 months.
AMP proposal: Manasota P&DC, FL;
Processing time: 4.8 months.
AMP proposal: Lakeland P&DC, FL;
Processing time: 4.8 months.
AMP proposal: Staten Island P&DF, NY;
Processing time: 4.6 months.
CSMPC - Customer Service Mail Processing Center;
MPA - Mail Processing Annex;
P&DC - Processing and Distribution Center;
P&DF - Processing and Distribution Facility;
PO - Post Office
SCF - Sectional Center Facility.
Source: GAO analysis of USPS data.
Note: The processing time was calculated using 30 days in a month; as
a result, the calculation above includes portions of the days in
months it took USPS to complete processing an AMP proposal. For
example, 7.5 months above translates to 7 months and 15 days for USPS
to complete processing the Oxnard P&DF proposal.
[End of figure]
An important part of the process is notifying and communicating with
stakeholders, and USPS completed these steps as called for in its
guidance. USPS is required to notify stakeholders, including
employees, employee organizations, appropriate individuals at various
levels of government, local mailers, community organizations, and the
local media, as to when a feasibility study is initiated and when a
final decision is made on the AMP proposal. According to its guidance,
USPS must also provide stakeholders with available information about
any service changes that may be affected from the proposed AMP
consolidation and give ample opportunities for stakeholders to provide
input on the AMP proposals. USPS is also required to conduct a public
meeting after the local USPS management completes and forwards the
feasibility study to regional and headquarters management for their
review. We reported in 2008 that USPS had improved communication with
stakeholders with regard to AMP proposals. In our analysis, we found
that USPS consistently notified the stakeholders when a feasibility
study was initiated and when a final decision was made; we also found
that USPS consistently held public meetings and summarized public
input for each AMP proposal we reviewed. Representatives of the postal
unions we spoke with also commented that the USPS has been following
the process and communicating with them and that the local union
representatives generally attended the public meetings and were
involved with the process.
The last step in the AMP process is completion of two
postimplementation reviews to assess the results of the consolidation.
USPS has completed two reviews of the 32 AMP proposals we reviewed and
is in the process of completing five more. The postimplementation
reviews are intended to evaluate and measure the actual results of
consolidation decisions, including realized savings in work hours,
transportation, maintenance, and facility costs. In the first
postimplementation review of the consolidation of the Kansas City P&DC
in Kansas into the Kansas City P&DC in Missouri, USPS identified cost
savings of about $22.3 million after the consolidation--$13 million
more than its original projected savings of $9.3 million.[Footnote 10]
USPS officials commented that several factors unrelated to the
consolidation, such as the use of in-house maintenance employees
rather than outsourced labor for facility projects and incentives for
retirement in the fall of 2009, contributed to the larger than
expected savings. Similarly, USPS identified cost savings of about
$6.3 million in the first postimplementation review of the Canton P&DC
consolidation with the Akron P&DC in Ohio--$4.1 million more than its
original projected savings of $2.2 million. According to USPS
officials, the original projections were made based on expected
savings resulting from the consolidation. For both postimplementation
reviews, additional savings have been realized in part because mail
volume has continued to decline resulting in further reductions in
work hours and transportation costs.
USPS Has Consistently Considered Its Criteria in the Decision-Making
Process:
Based on our analysis of 32 AMP proposals that USPS had decided on
since October 2008, USPS consistently considered the criteria in its
guidance when making its decisions. According to the AMP guidance,
USPS must consider the following four criteria:
* impacts on the service standards for all classes of mail,
* issues important to local customers,
* impacts to USPS staffing, and:
* savings and costs associated with moving mail processing operations.
We also found that USPS has standardized its AMP data sources and
analytical methodologies to achieve more consistent analysis when
evaluating the criteria during the decision-making process. In
addition, the OIG independently reviews data and the criteria USPS has
used to validate the business cases for some AMP proposals. For
instance, the OIG validated the business case for some of the AMP
proposals we reviewed, including the consolidations of operations at
Dallas P&DC into North Texas P&DC in Texas and New Castle processing
and distribution facility (P&DF) into Pittsburgh P&DC in
Pennsylvania.[Footnote 11] Additionally, the OIG concurred with the
business decisions for consolidating mail processing operations at the
Canton P&DC with the Akron P&DC in Ohio and Lakeland P&DC and Manasota
P&DC with the Tampa P&DC in Florida. While USPS consistently evaluated
these criteria, a stakeholder we spoke with commented that USPS does
not provide a complete set of data it uses to make its decisions.
Although USPS is not required to provide complete data that are used
to consider AMP proposals under the AMP guidance, the stakeholder
believed that more data transparency is needed to permit validation of
USPS's AMP decisions. According to USPS officials and USPS guidance,
AMP proposals contain commercially sensitive information, and public
disclosure of the information could cause competitive harm to USPS.
Accordingly, sensitive data contained in AMP proposals is redacted.
For the proposals we reviewed, we found that USPS assessed the impact
that a consolidation would have on the service standards for all
classes of mail and considered issues important to local customers.
[Footnote 12] Two of the AMP proposals we reviewed--the consolidation
of operations at Mansfield P&DF into Akron P&DC in Ohio and Zanesville
Post Office into Columbus P&DC in Ohio--were not approved due to a
potential downgrade in the delivery services for First-Class MailŪ,
despite potential cost savings for consolidating those facilities. In
other instances, the AMP proposal was approved even though a downgrade
in service for a particular class of mail was identified, such as
Package Services, because an upgrade in delivery services of other
mail classes was also identified, such as First-Class MailŪ. According
to USPS officials, it is the overall net effect of changes in delivery
services that are considered in the decision-making process. In the
case of considering issues important to local customers, USPS assessed
whether the AMP proposal would impact customer service, such as any
changes in mail pickup times, hours for business mail acceptance, and
hours of retail operations. In many of the AMP proposals we reviewed,
USPS forecasted that there would be no adverse impact on local
customer service. USPS also forecasted that many of the retail hours
at bulk mail entry units covered in the AMP proposals would not be
changed.
The impact that an AMP proposal would have on USPS staffing and
estimating savings and costs associated with the consolidation are
also important criteria in the AMP decision process. When considering
the impact on staffing, USPS examined and estimated the potential
number of positions that would be reduced or transferred to gaining
facilities. This is a reduction in the number of positions that are
allotted to a facility and not necessarily a loss of employees.
Employees, who are impacted by the consolidation, are given positions
in the gaining facility, or other facilities, in accordance to their
respective collective bargaining agreements.[Footnote 13] USPS
estimated a total reduction of 1,263 allotted positions for the AMPs
we reviewed. In estimating potential costs and savings, USPS assessed
work hour savings from staffing changes, savings associated with
transportation and maintenance, as well as savings associated with
space and leasing facilities. USPS also examined one-time costs
associated with relocating staff, moving mail processing equipment,
and changing facilities. If overall estimated cost savings were not
identified, then the AMP proposal would not proceed. For example,
while cost savings were identified in the AMP proposal to consolidate
operations at Hattiesburg Customer Service Mail Processing Center with
Gulfport P&DF in Mississippi, the proposal was not approved because
one-time costs associated with moving mail processing equipment were
not identified, and thus, the estimated total annual savings were
insufficient. USPS estimated a total annualized cost savings of about
$98.5 million for the 29 approved and implemented AMP proposals we
reviewed.[Footnote 14]
USPS Implementation of 2005 Recommendation:
In 2005, we reported that because USPS did not have criteria to
consider, or a process to follow, when making mail processing
consolidation decisions, it was not clear whether the decisions would
be made in a manner that is fair to all stakeholders or that is
efficient and effective.[Footnote 15] As such, we recommended that
USPS establish a set of criteria for evaluating consolidation
decisions, develop a process for implementing these decisions that
includes evaluating and measuring the results, and develop a mechanism
for informing stakeholders as decisions are made. In 2008, we reported
that USPS had made progress on implementing our prior recommendations:
USPS established criteria for evaluating consolidation decisions,
developed a process for evaluating and measuring the results of its
AMP decisions, modified its AMP Communication Plan to improve public
notification, engagement, and transparency, and clarified its process
for addressing public comments.[Footnote 16] As stated earlier, we
found that USPS followed its AMP process and consistently applied its
criteria for evaluating AMP proposals that we reviewed.
Agency Comments:
We provided a draft of this report to USPS for official review and
comment. In response, USPS provided technical comments that we
incorporated where appropriate.
We are sending copies of this report to the Postmaster General,
appropriate congressional committees, and other interested parties.
The report also is available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you or your staff members have any questions concerning this
report, please contact me at (202) 512-2834 or herrp@gao.gov. Contact
points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix II.
Signed by:
Phillip R. Herr:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Area Mail Processing Proposals:
Table 2 below lists Area Mail Processing (AMP) proposals under review
by USPS, while Table 3 lists AMP proposals that we reviewed.
Table 2: Facilities Involved in AMP Proposals Under Review by USPS as
of March 2010:
Location of AMP proposal: California;
Facility downsizing operations[A]: Industry P&DC;
Facility gaining operations: Santa Ana P&DC.
Location of AMP proposal: California;
Facility downsizing operations[A]: Mojave P&DC;
Facility gaining operations: Bakersfield P&DC.
Location of AMP proposal: Florida;
Facility downsizing operations[A]: Daytona Beach P&DF;
Facility gaining operations: Mid-Florida P&DC.
Location of AMP proposal: Florida;
Facility downsizing operations[A]: Panama City P&DF;
Facility gaining operations: Pensacola P&DC.
Location of AMP proposal: Georgia;
Facility downsizing operations[A]: Atlanta P&DC;
Facility gaining operations: North Metro P&DC.
Location of AMP proposal: Georgia;
Facility downsizing operations[A]: Columbus CSMPC;
Facility gaining operations: Macon P&DC.
Location of AMP proposal: Illinois;
Facility downsizing operations[A]: Fox Valley P&DC;
Facility gaining operations: South Suburban P&DC.
Location of AMP proposal: Indiana;
Facility downsizing operations[A]: Lafayette P&DF;
Facility gaining operations: Indianapolis P&DC.
Location of AMP proposal: Kentucky;
Facility downsizing operations[A]: London P&DF;
Facility gaining operations: Lexington P&DC.
Location of AMP proposal: Kentucky/Tennessee;
Facility downsizing operations[A]: Bowling Green P&DF;
Facility gaining operations: Nashville P&DC.
Location of AMP proposal: Maryland;
Facility downsizing operations[A]: Easton P&DF;
Facility gaining operations: Baltimore P&DC.
Location of AMP proposal: Michigan;
Facility downsizing operations[A]: Kalamazoo P&DC;
Facility gaining operations: Grand Rapids P&DC.
Location of AMP proposal: Michigan;
Facility downsizing operations[A]: Saginaw P&DC;
Facility gaining operations: Lansing P&DC.
Location of AMP proposal: Mississippi;
Facility downsizing operations[A]: Grenada CSMPC;
Facility gaining operations: Jackson P&DC.
Location of AMP proposal: Mississippi/Tennessee;
Facility downsizing operations[A]: Tupelo CSMPC;
Facility gaining operations: Memphis P&DC.
Location of AMP proposal: New Jersey;
Facility downsizing operations[A]: Kilmer P&DC;
Facility gaining operations: Dominick V. Daniels P&DC/Trenton P&DC.
Location of AMP proposal: New Jersey;
Facility downsizing operations[A]: West Jersey P&DC;
Facility gaining operations: Northern Metro P&DC/Kilmer P&DC.
Location of AMP proposal: Ohio;
Facility downsizing operations[A]: Lima P&DF;
Facility gaining operations: Toledo P&DC.
Location of AMP proposal: Pennsylvania;
Facility downsizing operations[A]: Southeastern P&DC;
Facility gaining operations: Philadelphia P&DC.
Location of AMP proposal: Tennessee;
Facility downsizing operations[A]: Jackson CSMPC;
Facility gaining operations: Memphis P&DC.
Location of AMP proposal: Virginia;
Facility downsizing operations[A]: Dulles P&DC;
Facility gaining operations: Merrifield P&DC.
Location of AMP proposal: Virginia/Tennessee;
Facility downsizing operations[A]: Bristol P&DF;
Facility gaining operations: Johnson City P&DC.
Location of AMP proposal: West Virginia/Pennsylvania;
Facility downsizing operations[A]: Wheeling P&DF;
Facility gaining operations: Pittsburgh P&DC.
Location of AMP proposal: Wisconsin;
Facility downsizing operations[A]: Green Bay P&DC;
Facility gaining operations: Oshkosh P&DC.
Source: USPS.
[A] The types of facilities involved include: Customer Service Mail
Processing Center (CSMPC); Mail Processing Annex (MPA); Post Office
(PO); Processing and Distribution Center (P&DC); Processing and
Distribution Facility (P&DF); Sectional Center Facility (SCF).
[End of table]
Table 3: Facilities Involved in AMP Proposals USPS Approved from
October 2008 through March 2010:
AMP proposal location: California;
Facility downsizing operations[A]: Long Beach P&DC;
Facility gaining operations: Santa Ana P&DC;
Estimated annual savings as a result of consolidation: $3.2 million.
AMP proposal location: California;
Facility downsizing operations[A]: Marysville P&DF;
Facility gaining operations: Sacramento P&DC;
Estimated annual savings as a result of consolidation: $5.1 million.
AMP proposal location: California;
Facility downsizing operations[A]: Oxnard P&DF;
Facility gaining operations: Santa Clarita (Van Nuys) P&DC;
Estimated annual savings as a result of consolidation: $1.8 million.
AMP proposal location: Florida;
Facility downsizing operations[A]: Lakeland P&DC;
Facility gaining operations: Tampa P&DC;
Estimated annual savings as a result of consolidation: $1.5 million.
AMP proposal location: Florida;
Facility downsizing operations[A]: Manasota P&DC;
Facility gaining operations: Tampa P&DC;
Estimated annual savings as a result of consolidation: $3.2 million.
AMP proposal location: Florida;
Facility downsizing operations[A]: South Florida P&DC;
Facility gaining operations: Fort Lauderdale P&DC/Miami P&DC;
Estimated annual savings as a result of consolidation: $2.8 million.
AMP proposal location: Georgia;
Facility downsizing operations[A]: Athens CSMPC;
Facility gaining operations: North Metro P&DC;
Estimated annual savings as a result of consolidation: $2.4 million.
AMP proposal location: Illinois;
Facility downsizing operations[A]: Palatine P&DC;
Facility gaining operations: Carol Stream P&DC;
Estimated annual savings as a result of consolidation: $9.5 million.
AMP proposal location: Indiana;
Facility downsizing operations[A]: Bloomington MPA;
Facility gaining operations: Indianapolis P&DC;
Estimated annual savings as a result of consolidation: $1.1 million.
AMP proposal location: Kansas/Missouri;
Facility downsizing operations[A]: Kansas City P&DC;
Facility gaining operations: Kansas City P&DC;
Estimated annual savings as a result of consolidation: $9.3 million.
AMP proposal location: Maryland;
Facility downsizing operations[A]: Frederick P&DF;
Facility gaining operations: Suburban P&DC;
Estimated annual savings as a result of consolidation: $1.1 million.
AMP proposal location: Massachusetts;
Facility downsizing operations[A]: Cape Cod P&DF;
Facility gaining operations: Brockton P&DC;
Estimated annual savings as a result of consolidation: $1.9 million.
AMP proposal location: Michigan;
Facility downsizing operations[A]: Detroit P&DC;
Facility gaining operations: MI MetroPlex P&DC;
Estimated annual savings as a result of consolidation: $4.4 million.
AMP proposal location: Michigan;
Facility downsizing operations[A]: Flint P&DC;
Facility gaining operations: MI MetroPlex P&DC;
Estimated annual savings as a result of consolidation: $1.4 million.
AMP proposal location: Mississippi;
Facility downsizing operations[A]: Hattiesburg CSMPC;
Facility gaining operations: Gulfport P&DF;
Estimated annual savings as a result of consolidation: Data not
applicable[B].
AMP proposal location: New Hampshire;
Facility downsizing operations[A]: Portsmouth P&DF;
Facility gaining operations: Manchester P&DC;
Estimated annual savings as a result of consolidation: $1.2 million.
AMP proposal location: New Jersey;
Facility downsizing operations[A]: Newark P&DC;
Facility gaining operations: Dominick V. Daniels P&DC;
Estimated annual savings as a result of consolidation: $3.5 million.
AMP proposal location: New York;
Facility downsizing operations[A]: Binghamton P&DF;
Facility gaining operations: Syracuse P&DC;
Estimated annual savings as a result of consolidation: $1.2 million.
AMP proposal location: New York;
Facility downsizing operations[A]: Queens P&DC;
Facility gaining operations: Brooklyn P&DC;
Estimated annual savings as a result of consolidation: $6.6 million.
AMP proposal location: New York;
Facility downsizing operations[A]: Staten Island P&DF;
Facility gaining operations: Brooklyn P&DC;
Estimated annual savings as a result of consolidation: $1.9 million.
AMP proposal location: New York;
Facility downsizing operations[A]: Watertown PO;
Facility gaining operations: Syracuse P&DC;
Estimated annual savings as a result of consolidation: $2.7 million.
AMP proposal location: New York;
Facility downsizing operations[A]: Western Nassau P&DC;
Facility gaining operations: Mid-Island P&DC;
Estimated annual savings as a result of consolidation: $2.9 million.
AMP proposal location: North Carolina;
Facility downsizing operations[A]: Hickory P&DF;
Facility gaining operations: Greensboro P&DC;
Estimated annual savings as a result of consolidation: $1.3 million.
AMP proposal location: North Carolina;
Facility downsizing operations[A]: Kinston P&DF;
Facility gaining operations: Fayetteville P&DC;
Estimated annual savings as a result of consolidation: $1.1 million.
AMP proposal location: Ohio;
Facility downsizing operations[A]: Canton P&DF;
Facility gaining operations: Akron P&DC;
Estimated annual savings as a result of consolidation: $2.2 million.
AMP proposal location: Ohio;
Facility downsizing operations[A]: Mansfield P&DF;
Facility gaining operations: Akron P&DC;
Estimated annual savings as a result of consolidation: Data not
applicable[B].
AMP proposal location: Ohio;
Facility downsizing operations[A]: Zanesville PO;
Facility gaining operations: Columbus P&DC;
Estimated annual savings as a result of consolidation: Data not
applicable[B].
AMP proposal location: Pennsylvania;
Facility downsizing operations[A]: New Castle P&DF;
Facility gaining operations: Pittsburgh P&DC;
Estimated annual savings as a result of consolidation: $1.5 million.
AMP proposal location: Pennsylvania;
Facility downsizing operations[A]: Wilkes-Barre P&DF;
Facility gaining operations: Lehigh Valley P&DC/Scranton P&DC;
Estimated annual savings as a result of consolidation: $6.1 million.
AMP proposal location: Texas;
Facility downsizing operations[A]: Dallas P&DC;
Facility gaining operations: North Texas P&DC;
Estimated annual savings as a result of consolidation: $9.4 million.
AMP proposal location: Virginia;
Facility downsizing operations[A]: Charlottesville P&DF;
Facility gaining operations: Richmond P&DC;
Estimated annual savings as a result of consolidation: $6.5 million.
AMP proposal location: Virginia;
Facility downsizing operations[A]: Winchester SCF;
Facility gaining operations: Dulles P&DC;
Estimated annual savings as a result of consolidation: $1.6 million.
Total estimated annual savings: $98.5 million.
Source: GAO analysis of USPS data.
[A] The types of facilities involved include: P&DC, P&DF, PO, CSMPC,
SCF, and MPA.
[B] Although we reviewed 32 AMP proposals, 3 of them were not approved
and, therefore, we did not include the estimated cost savings in our
analysis.
[End of table]
[End of section]
Appendix II: GAO Contact and Staff Acknowledgments:
GAO Contact:
Phil Herr, (202) 512-2834, or herrp@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Maria Edelstein, Assistant
Director; Colin Fallon; Brandon Haller; Jennifer Kim; Jaclyn Nelson;
and Crystal Wesco made key contributions to this report.
[End of section]
Footnotes:
[1] GAO, U.S. Postal Service: The Service's Strategy for Realigning
Its Mail Processing Infrastructure Lacks Clarity, Criteria, and
Accountability, [hyperlink, http://www.gao.gov/products/GAO-05-261]
(Washington, D.C.: Apr. 8, 2005) and GAO, U.S. Postal Service: Mail
Processing Realignment Efforts Under Way Need Better Integration and
Explanation, [hyperlink, http://www.gao.gov/products/GAO-07-717]
(Washington, D.C.: June 21, 2007).
[2] GAO, U.S. Postal Service: Progress Made Toward Implementing GAO's
Recommendations to Strengthen Network Realignment Planning and
Accountability and Improve Communication, [hyperlink,
http://www.gao.gov/products/GAO-08-1134R] (Washington, D.C.: Sept. 25,
2008).
[3] Office of Inspector General, U.S. Postal Service, Status Report on
the Postal Service's Network Rationalization Initiatives (Report
Number EN-AR-10-001) (Washington, D.C.: Jan. 7, 2010).
[4] The USPS manages its mail processing operations in eight areas
(Capital Metro, Eastern, Great Lakes, Northeast, Pacific, Southwest,
Southeast, and Western) with local district offices nationwide. This
report refers to USPS's eight areas as regional management and local
district offices as local management.
[5] USPS process three basic mail shapes--letters (includes
postcards), flats (includes large envelopes, magazines, and catalogs)
and parcels (or packages)--through six classes of mail--Express MailŪ,
Priority MailŪ, First-Class MailŪ, Standard MailŪ, Periodicals, and
Package Services.
[6] See [hyperlink, http://www.gao.gov/products/GAO-08-1134R].
[7] Originating mail refers to outgoing and local mail that enters the
point of origin for mail processing. Local mail remains within the
facility and is combined with destinating mail from other origin
facilities. Destinating mail refers to mail arriving at point of entry
for distribution and dispatch to a post office for delivery.
[8] At the STCs, USPS consolidates containers from multiple facilities
to maximize the use of transportation.
[9] We did not include 5 of the 32 AMP proposals (Canton, OH; Flint,
MI; Kansas City, KS; Detroit, MI; and Zanesville, OH) in our analysis
of the processing time because the AMP feasibility study began prior
to the USPS's revision of its AMP guidance in March 2008. According to
USPS officials, these proposals were delayed while the revisions to
the AMP guidance were made and then evaluated again based on the
revised guidance.
[10] USPS fully implemented the consolidation of Kansas City P&DC in
Kansas into the Kansas City P&DC in Missouri on July 1, 2009. USPS did
not renew the lease of the Kansas City P&DC in Kansas, and it was
closed in January 2010.
[11] Office of Inspector General, U.S. Postal Service, Dallas
Processing and Distribution Center Outgoing Mail Consolidation (Report
Number NO-AR-10-003) (Washington, D.C.: Feb. 24, 2010) and New Castle
Processing and Distribution Facility Outgoing Mail Consolidation
(Report Number NO-AR-10-002) (Washington, D.C.: Feb. 1, 2010).
[12] Service standards are USPS's goal that directs how many days it
should take mail to reach its destination, depending on its origin and
mail class. For instance, First-Class MailŪ has service standards of
overnight, 2 and 3 days depending on the distance it has to travel.
[13] According to its Network Plan, USPS's first step in minimizing
the impact of network initiatives on employees is to explore
internally reassigning career employees affected by organizational
change.
[14] Although we reviewed 32 AMP proposals, 3 of them were not
approved and, therefore, we did not include the estimated cost savings
in our analysis.
[15] [hyperlink, http://www.gao.gov/products/GAO-05-261].
[16] [hyperlink, http://www.gao.gov/products/GAO-08-1134R].
[End of section]
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