GAO: Cut Postal excess

U.S. Postal Service: The Service's Strategy for Realigning Its Mail Processing Infrastructure

The U.S. Postal Service's nationwide mail processing and distribution system has too much capacity because technology has replaced human work, but Postal officials have no clear strategy for closing facilities or cutting jobs no longer needed, according to the Government Accountability Office.

USPS has excess capacity largely because of its success at automation. GAO auditors also cited sharp declines in first-class mail volumes and work-sharing arrangements with mailers, who do work USPS employees used to perform.

Officials at USPS are struggling to find ways to eliminate the unnecessary overhead. They had hoped that a sophisticated modeling tool would help them create a "least-cost" processing and distribution network. By entering workforce and facilities data into the so-called Network Integration and Alignment tool, officials expected to get output that would show where the system was inefficient.

But postal managers subsequently found that the data entered into the model changed too frequently or was simply inaccurate, which meant they couldn't trust the tool's assumptions and recommendations for plant closings and workforce reductions. USPS officials are now saying little about their nationwide infrastructure plans, according to the GAO report.

A desire to avoid controversy is another reason for secrecy about future plant closings and job losses. USPS officials told GAO auditors they are frequently blocked when they try to realign their infrastructure capacity with current needs. USPS "believes that it will meet with resistance from employees, communities and government representatives if it tells them what it is planning on doing too far in advance," the auditors wrote.

Nevertheless, GAO officials cite figures in the report that show the agency, despite resistance from lawmakers and union employees, is reducing its workforce. During the past four years, USPS officials have eliminated more than 170 million work hours and taken 80,000 career employees off the payroll. About 700,000 employees remain.

GAO auditors conducted their review from April 2004 to January 2005. In their recommendations, they asked postal managers to focus on:

• Establishing criteria for evaluating realignment decisions.

• Developing a mechanism for informing stakeholders as realignment decisions are made.

• Developing a process for making realignment decisions that includes evaluating and measuring the results and actual costs and savings from those decisions.