USPS OIG: The Ups and Downs of Productivity

Blame it on the rain. Or the heat, or the snow. Weather, it seems, has an impact on the U.S. Postal Service’s productivity. Geographic regions with extreme climate – other things being equal – have lower productivity than moderate climate regions.

Climate isn’t the only regional factor. Cost of living and terrain ruggedness also have an impact on the productivity in a region.

But wait, there’s more! Some of the variance in productivity throughout the country is unexplained. Our recent white paper, Geographic Variation in Productivity, which follows up on our previous work around mail volume trends by geographic region, studied the Postal Service’s comprehensive Total Factor Productivity measurement to see why productivity varies so widely throughout the country. The map above illustrates the unexplained variation that remains once we remove the three factors-weather, cost of living, and ruggedness-with areas in green indicating higher productivity and those in red lower.

The three we quantified in our study – climate, cost of living, and terrain ruggedness – explain about 23 percent of total observed variation in productivity. That leaves 77 percent of variation unexplained, which provides a significant opportunity for the Postal Service to improve its productivity. USPS can’t control the weather or a region’s topography, of course. But it might be able to control some of these unexplained variances in productivity, which could include quality of management, facility design, or employee dynamics.

Our paper encourages further study of areas likely to yield substantial productivity improvements. Such analysis could also detect areas where productivity is higher than expected, which, once identified, could serve as best practices around which to build improvements.


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