The U.S. Postal Service lacks a clear plan for realigning its infrastructure in the face of declining mail volumes and excess capacity, according to a General Accountability Office report issued Monday.
The report, “The Service's Strategy for Realigning Its Mail Processing Infrastructure Lacks Clarity, Criteria and Accountability,” also takes the USPS to task for failing to communicate with stakeholders and make its planning efforts sufficiently transparent.
The GAO issued the report at the request of Reps. Danny Davis, D-IL, and John McHugh, R-NY. McHugh and Davis serve as chairman and ranking minority member, respectively, of the House Special Panel on Postal Reform & Oversight, which is working on postal reform.
The USPS “has outlined several seemingly different strategies” for realignment in the past three years, the report said. The postal service also recently said that it will pursue an “evolutionary” plan for change, addressing opportunities for realignment as they arise, but has given no details about this plan, according to the report.
“This evolutionary strategy and the lack of detailed information about it raise many issues, including what the strategy is and whether it will enable the Service to meet the challenge of removing excess capacity in its infrastructure by closing unnecessary facilities,” the report said.
The report maintains that the strategy lacks criteria and specific processes to eliminate excess capacity as well as performance standards to evaluate the results of decisions. A lack of communication with stakeholders makes it hard for mailers to help keep costs of the mailing network down and for USPS employees and the public to understand how changes affect them, it said.
The GAO urged the postmaster general to establish criteria for evaluating realignment efforts and develop a process for evaluating and measuring results as part of the process of implementing realignment decisions. It also urged the USPS to create a better mechanism for informing stakeholders of realignment decisions as they are made.
In a joint statement, Davis and McHugh said they were concerned about the GAO's findings and would push the USPS to establish criteria for judging the effect of realignment efforts and to increase communication with stakeholders. The first step in the process is the Postal Accountability and Enhancement Act, the reform package that passed the House Government Reform Committee last month, they said.
According to the report, the USPS concurred with the GAO's descriptions of its infrastructure and assessment of the changes affecting its business, but did not respond directly to the GAO's criticisms or recommendations. A USPS spokesman told DM News yesterday that the postal service appreciated the recommendations and was pursuing them, such as by improving communications with members of Congress, employees and constituents.
The report cited several marketplace changes affecting the USPS. The postal service's total mail volume declined by 1.8 billion pieces from 2000 to 2004, and the nation's population has shifted to the South and West while most postal processing plants remain in the East.
Postal plants also have become specialized in certain types of mail, driving up per-piece costs, and plants vary widely in productivity, the report said. It found that small plants process 1,970 pieces per employee, per hour, outpacing midsize plants averaging 1,700 per hour, per employee. Large plants average 1,495 per hour, per employee.
The 89-page report is available at gao.gov/new.items/d05261.pdf.
Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters