USPS OIG – Deployment of Operational Changes by newly appointed Postmaster General DeJoy

Objective

On October 19, 2020, we issued a report to the U.S. Postal Service Board of Governors that addressed specific questions asked by Members of Congress regarding modifications to Postal Service staffing and policies, mail service impacts, compliance with applicable laws and regulations, communication with Congress and customers, and the Postmaster General’s compliance with financial conflict of interest laws and regulations (Operational Changes to Mail Delivery – Report Number 20-292-R21). The objective of this report is to provide our evaluation of those operational changes to management with recommendations for corrective actions.

In July and August 2020, newly appointed Postmaster General DeJoy implemented the following three operational and organizational changes:

  • Elimination of late and extra trips to transport mail: Started July 10, 2020, this initiative was to eliminate all late and extra trips outside of regularly scheduled transportation service.
  • Organization Restructure: On August 7, 2020, the Postmaster General announced a reorganization of field operations and headquarters functions to align functions based on core business operations.
  • Expedited Street Afternoon Sortation (ESAS): This initiative began as a pilot program at 384 facilities nationwide on July 25, 2020, and was designed to eliminate excessive pre- and post-tour overtime.

In addition to these three changes, Postal Service operations executives deployed 57 initiatives to achieve fiscal year (FY) 2021 financial targets and reduce workhours, one of which matched the Postmaster General’s strategies (Late/Extra Trips). These operational change initiatives were developed to achieve an estimated 64 million workhour savings.

Termed “Do It Now FY Strategies,” these initiatives outlined changes from current operations in each function including mail processing, vehicle and maintenance, and post office operations (delivery and retail). They included eliminating pre-tour overtime in city delivery operations, elimination of certain mail processing operations on Saturday, and alignment of clerk workhours to workload. These initiatives were generated from and executed by operations executives, and were discussed at an introductory meeting with the new Postmaster General on July 7, 2020.

As we have noted in a series of reports, the Postal Service has struggled in recent years to meet mail service performance standards, which it measures based on mail speed and reliability. In FY 2019, it met annual performance targets for only seven of 22 mail products (32 percent). Our recent reports have also noted that the Postal Service has numerous opportunities for greater efficiencies and cost savings.

Issues

The Postal Service’s implementation of operational changes and initiatives in June and July 2020 resulted in a significant drop in the quality and timeliness of mail delivery. We found the implementation of these initiatives was:

  • Communicated primarily orally which resulted in confusion and inconsistent application of operational changes across the country.
  • Implemented without completing a study or analysis of the impact of the changes on mail service, even though critical employee availability issues were being felt as pandemic cases rose following the July 4 holiday weekend.

The collective results of these initiatives, combined with the ongoing employee availability challenges resulting from the pandemic, negatively impacted the quality and timeliness of mail delivery nationally. The Postal Service’s mail service performance significantly dropped beginning in July 2020, directly corresponding to implementation of the operational changes and initiatives.

Most notably, service performance indicators declined significantly in July 2020, for all mail products we reviewed:

  • First-Class Single Piece declined from 90.1 to 79.7 (10.4 percentage points).
  • First-Class Presort declined from 92.2 to 82.9 (9.3 percentage points).
  • First-Class Packages declined from [redacted] to [redacted] percentage points).
  • Priority Mail declined from [redacted] to [redacted] percentage points).

We also noted:

  • Delayed mail reported in Postal Service systems for mail processing facilities increased 21 percent, from 2 billion pieces for the week ending July 10, 2020 to 2.4 billion pieces for the week ending July 31, 2020.
  • Delayed mail, which is self-reported at post offices, increased 143 percent, from 4.7 million for the week ending July 10, 2020, to 11.4 million for the week ending July 31, 2020.

To further evaluate these impacts, we conducted a non-statistical mail test of 300 mailpieces in August 2020. Our results showed [redacted] percent of Priority Letter Flats, 24 percent of Certified Letters, and 14 percent of First-Class Letters [redacted].

We also observed operations at five mail processing and eight delivery facilities in August 2020 and found delayed mail at all five mail processing facilities and significant amounts of delayed mail at seven of the eight delivery units. According to management at these facilities, the increased delayed mail was due to COVID-19 impacts, such as employee availability, increases in package volume, local directives to reduce overtime and a requirement for carriers to stop mail delivery at 8 p.m., and the restrictions on extra trips.

According to Postal Service officials, the service impacts caused by the operational changes were temporary. Based on our review of data from the first week of September, we noted service had improved from the July lows as follows:

  • First-Class Single Piece improved from 79.7 to 86.8 (7.1 percentage points) but was still below the target of 96.
  • First-Class Presort improved from 82.9 to 88.6 (5.7 percentage points) but was still below the target of 96.
  • First-Class Packages improved from [redacted] to [redacted] percentage points) [redacted].
  • Priority Mail improved from [redacted] to [redacted] percentage points) [redacted].

Communications with Congress and Customers

We also found the Postal Service’s communication with Congress and customers was lacking in completeness and clarity. Although information was generally accurate, the Postal Service’s did not:

  • Fully respond to questions and document requests made by members of Congress in July 2020.
  • Share information on many of the specific initiatives implemented beyond those the Postmaster General initiated directly or was specifically asked about by members of Congress.
  • Indicate that some of the initiatives that started prior to the arrival of the Postmaster General were being accelerated to more quickly achieve projected savings.
  • Broadly communicate the planned changes with mailing industry customers or coordinate on potential service impacts.

Looking Forward

According to Postal Service officials, the service impacts caused by the operational changes will not impact election mail for the upcoming 2020 election. The Postal Service has established processes for handling election mail and efforts have been ongoing to train and prepare their employees on Election Mail policies and procedures. Training includes proper postmarking, proper handling and processing, and recognition and use of Tag 191, which identifies ballots. The Postal Service is now also subject to preliminary orders from at least four federal district courts imposing additional requirements on the handling of election mail.

On August 18, 2020, the Postmaster General announced that he would cease removal and reconfiguration of mail processing equipment and postpone collection box removals until after the 2020 election to avoid the appearance of any impact on Election Mail. The ESAS pilot in Delivery Operations was also cancelled on that day.

In a September 21, 2020, memo to officers, executives, and managers, the Chief Retail and Delivery and Chief Logistics and Processing Operations officers disclosed that beginning October 1, 2020, the Postal Service would make additional resources available in all areas of operations, including collection, processing, delivery, and transportation to satisfy increased demand and unforeseen circumstances. They also provided clarifying guidance in the areas of overtime, hiring, retail hours, collection boxes, late and extra trips, mail processing, and election mail.

Recommendations

We recommended the Postmaster General instruct management to:

  • Conduct a service impact analysis to identify risks and mitigating strategies considering the effects of the pandemic and expected volumes during the upcoming election and peak season, prior to implementing further cost-cutting strategies.
  • Suspend ongoing and additional cost-reduction efforts until after the election and holiday mailing season and after an analysis of service impacts has been completed.
  • Develop and implement a strategy to communicate in writing to all employees the status of ongoing and suspended operational changes to promote message clarity, alignment, and saturation.
  • Develop and implement a communication strategy to inform Congress and customers of planned and ongoing operational changes that may impact mail service.

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