Background

The U.S. Postal Service announced that it will convert select facilities around the country into sorting and delivery centers (S&DCs) as part of the 10-year strategic Delivering for America plan. S&DCs will consolidate carrier operations from multiple delivery units into one facility. The Postal Service converted two facilities in Gainesville and Panama City, FL, into S&DCs in February 2023. According to the Postal Service, S&DCs are a vital part of its network modernization and will reduce transportation and mail handling costs.

What We Did

Our objective was to assess the impact of the Postal Service’s S&DC implementation in the Postal Service’s Florida 1 District. We analyzed service performance data for fiscal year (FY) 2023 through FY 2024 year-to-date and mailpiece visibility data for FY 2022 through FY 2023, observed operations, and interviewed Postal Service personnel at two S&DCs, four networked facilities, and nine delivery units.

What We Found

The Postal Service had not fully adjusted operations to realize the projected benefits to transportation following the implementation of S&DCs in the Florida 1 District. Specifically, actual cost savings from eliminating highway contract route trips and consolidating carrier routes did not meet FY 2023 estimates. We also found that the Panama City S&DC does not use Surface Visibility to perform container “load” and “unload” scans. Without those scans, the Postal Service cannot accurately measure its progress toward optimizing truck routes, eliminating unnecessary trips, and ensuring optimal truck utilization while meeting service standards. Further, delivery units with consolidated carrier operations at S&DCs did not consistently meet scheduled up-time for Post Office Box mail; attempted delivery mail was difficult to track, causing customer dissatisfaction; and Priority Mail Express did not meet its service standard in the Florida 1 district. As a result, we estimated the Postal Service paid in actual refunds and faced potential refundable revenue for the Priority Mail Express mailpieces that were not delivered timely for FY 2022 and 2023.

Recommendations and Management Comments

We made seven recommendations to address the issues around planning and implementation, ongoing construction activities, lack of truck utilization data, late delivery unit Post Office Box up-times, difficulty tracking redelivery mailpieces, and Priority Mail Express missing its collection deadline. Management’s comments and our evaluation are at the end of each finding and recommendation. The U.S. Postal Service Office of Inspector General considers management’s comments responsive to recommendations 2, 4, 5, 6 and 7, and corrective actions should resolve the issues identified in the report. See Appendix B for management’s comments in their entirety.

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Source: USPS OIG