This report presents the results of the Postal Service’s progress in reducing workhours based on recommendations in a prior report.1 Our objective was also to assess the
overall efficiency of the processing and distribution network for fiscal year (FY) 2009 (Project Number 10XG017NO000). This is a cooperative effort with the Postal Service
and addresses operational risk. See Appendix A for additional information about this review.
Last year, we reported on efficiency levels and mail volume in processing and distribution centers (P&DCs) and facilities (P&DFs), and recommended the Postal Service reduce almost 23 million workhours by FY 2011. The goal of the previous effort was to report out on Postal Service’s efforts to “raise the bar” on productivity levels for those plants that were the least productive in the network nationwide. We took a similar approach in this report and plan to conduct this type of analysis annually.
The Postal Service made substantial progress by reducing workhours in the network from the previous year. Plants that were the least productive in FY 2008 reduced over
18 million workhours (achieving 82 percent of the recommended workhour savings) and improved productivity by over 6 percent. Moreover, from Quarter 1 (Q1), FY 2009 to Q1,
FY 2010, the Postal Service maintained or improved service. See Appendix B for more information.
However, we found the Postal Service had not yet fully adjusted workhours in response to declining mail volume as a result of poor economic conditions, nor achieved all
possible efficiencies in mail processing operations.
We identified five major areas where the Postal Service could realize workhour savings:
– Overtime Hours
– Mail Handling
– Automated and Mechanized Equipment
– Allied Operations
– Manual Operations
The Postal Service could improve operational efficiency by reducing over 16.2 million workhours by the end of FY 2012. This would allow the Postal Service to achieve at
least median productivity levels in the network and avoid costs of almost $744 million based on workhour savings for 1 year.2 See Appendix C for a detailed explanation of
this cost avoidance.