USPS OIG – Nationwide Service Performance

Objective

Our objective was to assess the U.S. Postal Service’s service performance for all mail classes over an 18-month period and determine the most common failure points in the mail flow process.

Mail is divided into different categories called “classes,” each having different features, service levels, and postage rates. The Postal Service has service standards for delivering mail in each class after receiving it from the customer. The delivered mail is measured against the service standards and the service performance targets for each mail class to determine the percentage of mail delivered on time.

We analyzed service performance for Priority, First-Class, Periodicals, Marketing, and Bound Printed Matter mail classes. We also reviewed data to identify where in the mail flow process service failures occurred.

Using service performance data for the period of October 1, 2019, through February 28, 2021, we judgmentally selected six mail processing facilities with large numbers of service failures and two with fewer service failures. In April and May 2021, we observed the mail flow process to determine where service failures occurred the most often at the selected facilities. This included observations of mail during processing, transportation in and out of the processing facilities, and delivery at 14 delivery units serviced by those facilities.

Findings

During the period under review, which was greatly impacted by the COVID-19 pandemic, the amount of mail and parcels delivered on time decreased for all mail classes, primarily during the FY 2021 peak mailing season (from November 2020 – January 2021). During February and March 2021, the amount of mail delivered on time improved by 6 percentage points, but [redacted], in part due to weather impacts of major winter storms. We analyzed Informed Visibility data to determine where the largest failures in the mail flow process for letters and flats were occurring and found that most pieces failed in the transit phase of the mail cycle, followed by the last mile phase. The third largest number of failures was categorized as “Unable to Assign.” During our site visits, we found increased parcel volume, challenges with transportation of mail, and low employee availability affected the Postal Service’s ability to process, transport, and deliver mail and parcels timely.

Service Performance

The Postal Service only met service performance targets for three of 33 products in FY 2020. The worst performance was between October and December 2020, when the amount of letter and flat mail (First-Class, Marketing, Periodical, and Bound Printed Matter) delivered on time was 81.9 percent, which was between 8.1 and 14.1 percent below targets. Likewise, the number of parcels (First-Class and Priority) delivered on time was [redacted] percent, which were both [redacted] percent below target. In April 2021, the amount of mail delivered on time continued to improve while the volumes started to decline and both trends have continued through June 2021.

On May 6, 2021, the Postal Service Board of Governors decreased service performance targets for most of its mail classes from 2.8 to 26.6 percent. The Postal Service stated this was done to ensure the targets were meaningful and to account for the ongoing and unprecedented impacts of the COVID-19 pandemic.

Most Common Failure Points

We reviewed data on where service failures occurred the most often during the mail flow process and identified the associated root causes during our site visits:

  • Letters, Flats, and Parcels were not processed at the destinating facility on-time due to transportation and facility processing delays. We also saw a large number of non-machinable parcels and not enough staff available to process them on time. Further, the facilities did not always process mail in a first-in first-out order to ensure timeliness.
  • Parcels were received from customers but not processed at the originating facility on- time due to insufficient processing capacity and a Postal management directive to focus on Priority mail over First-Class parcels.
  • Parcels were misrouted to incorrect facilities due to mechanical and human error.
  • Letters, Flats, and Parcels were processed on-time to meet delivery standards but were not delivered on time because mail was not consistently sorted for the carriers when it arrived at the delivery unit.

These common failure points were exacerbated by the overarching challenges experienced by the Postal Service throughout the COVID-19 pandemic, including increased parcel volume, lack of available transportation, and low employee availability.

Increased Parcel Volume

Increased parcel volume during each peak season [redacted] sort, transport, and deliver parcels and other mail. However, the increase in parcel volume was much greater and for a longer period of time during the FY 2021 peak mailing season due to the COVID-19 pandemic.

From October 2020 to March 2021, the Postal Service processed over [redacted] incoming and outgoing parcels, an increase of almost [redacted] percent compared to the October 2019 to March 2020 period. Some processing facilities experienced an even greater increase, with 61 of the 148 parcel processing facilities having a [redacted] percent or higher increase in parcel volume. The four parcel sites selected for review ranged from a [redacted] percent to a [redacted] percent increase in parcel volume from October 2020 to March 2021 when compared to October 2019 to March 2020. Management explained the unexpected increase in parcel volume created a shortage of floor space leading to operational gridlock in many locations. Management also said the increase in parcel volume exceeded the available capacity of air and surface transportation.

Transportation of Mail

Our data analysis showed late processing, air delays, and limitations in air carrier capacity as the root causes for late trips on both air and surface transportation. Our site observations supported the transportation failures identified in our data analysis.

Historically, commercial airlines carried an average of [redacted] percent of the First-Class air network volume. Due to the COVID-19 pandemic, the Postal Service lost over 50 percent of this capacity. To keep the mail moving, the Postal Service turned to its existing air partners (FedEx and UPS) and also began shifting some of its Priority and First-Class parcel volume from air to surface transportation in May 2020. Even with these mitigation strategies, we found the following transportation challenges affected service performance from October 1, 2019, to March 31, 2021:

  • Over 736 million mailpieces were delayed due to air capacity issues or commercial air delays.
  • 26 percent of all surface transportation trips arriving at processing facilities were late.
  • 14 percent of all surface transportation trips leaving processing facilities were late.

Employee Availability

Average employee availability at all facilities nationwide declined from October 1, 2019, through March 31, 2021. Specifically, the average employee availability decreased from 78.35 percent in 2019 to 77.14 percent in 2020 and has continued to decline in the first three months of 2021, averaging 75.64 percent.

During our site visits, we observed a lack of employee availability at mail processing facilities, in transportation networks, and at delivery units. The limited employee availability was due to employees using sick leave, emergency sick leave, dependent care leave, emergency paid leave, leave without pay, and being absent without leave during the COVID-19 pandemic. The lack of experienced employees to sort, distribute, and deliver the mail contributed to service performance failures. It also resulted in mail not processed or staged timely, empty mail transport equipment not removed which caused congestion on the floor, and some areas being unstaffed or understaffed due to mail handlers being moved to other machines.

Lack of employee availability impacted the Postal Service’s ability to meet service standards during the duration of the COVID-19 pandemic. We discussed employee availability with local management at each site and confirmed it as a root cause for their low service performance scores and found some facilities were impacted more than others.

Best Practices

During our site visits, we observed the best practices related to the timely processing of mail. In the sites with fewer service failures, we saw:

  • Increased daily discussions with the local processing, transportation, and delivery management components to communicate projected volumes and previous day’s issues.
  • Implementation of programs to increase employee engagement.
  • Updated dock signage to enable employees and drivers to easily locate and stage the mail.
  • Training for employees on proper staging and sequential processing to aid in locating, staging, and processing mail.

If implemented at facilities nationwide, these best practices may improve service performance.

Actions to Address Service Issues

On March 23, 2021, the Postal Service issued, Delivering for America, its Ten-Year Plan (Plan) for achieving financial sustainability and service excellence. The Plan outlines the challenges facing the Postal Service and its strategies to improve service performance. It also identifies the main causes for declining service as high parcel volume, a lack of available transportation, and low employee availability.

The Plan also notes that the Postal Service has not met First-Class Mail service performance targets since FY 2012. The Plan proposes to modify the existing service standards for First-Class Mail Letters and Flats from a current 1-to-3-day service standard (for mail being delivered within the continental U.S.) to a 1-to-5-day service standard to allow additional time for transporting mail long distances. The Plan also proposes to adjust service standards for First-Class Parcels to enable more parcels to be moved via ground transportation rather than on air transportation.

Recommendations

We recommended management:

  • Reemphasize the need for discussions among local processing, transportation, and delivery management components to communicate projected volumes and the previous day’s issues to proactively manage mail flow operations.
  • Investigate and understand the root causes for failed mailpieces in the “Unable to Assign” category, and work to decrease and maintain the total number of mailpieces in this category to under 10 percent of total failures.
  • Reemphasize and implement, as appropriate at facilities nationwide, best practices related to programs aimed at increasing employee engagement and training on the proper staging and sequential processing of mail to improve service performance.
  • When employee availability and transportation allow, direct local processing management to retain only the quantity of mail transport equipment the facilities and customers need for one week of mail processing operations in accordance with Handbook PO-502, Mail Transport Equipment.

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