Postal Service could have avoided paying almost 7 million of the 28 million overtime hours for full-time city letter carriers
Our analysis identified that, during FY 2009, city delivery supervisors scheduled full-time city delivery carriers to use overtime hours to deliver the mail on city routes.
Management actually expended overtime hours at a cost of more than $282 million, rather than use available and lower-cost PTF and transitional straight-time workhours at a cost of about $160 million. Using the lower cost employees would have saved approximately $122 million (see Table 1).
City Delivery Workforce Planning
The Postal Service’s workforce planning for city letter carriers did not always optimize its resources by maximizing the use of available and lower-cost part-time and
transitional carriers to reduce overtime costs for delivering the mail. Based on workload trends, vacancies, absences, and mail volume, supervisors decide either to use
overtime with full-time carriers or staff routes with part-time or transitional city letter carriers to ensure mail is delivered on routes.
The U.S. Postal Service is delivering fewer pieces of mail to a growing number of addresses as new households and businesses are added to the delivery network each year. During the past 3 years, the Postal Service reduced its city letter carrier workforce and workload; however, financial losses continue to occur while salary and benefits will continue to increase. The Postal Service must achieve unprecedented levels of efficiency to accommodate this new growth while facing financial loss from declining mail volume.
The Postal Service’s workforce planning process for city letter carriers did not always optimize available resources. In fiscal year (FY) 2009, the Postal Service could have avoided paying almost 7 million of the 28 million overtime hours for full-time city letter carriers by maximizing available, lower cost carrier resources to deliver the mail.
City Delivery Workforce Planning
Delivery management often used full-time city delivery carriers in overtime status to deliver the mail when using lower cost part-time and transitional carriers would have been more economical. Based on workload trends, vacancies, absences, and mail volume, supervisors decide either to use overtime with full-time carriers or staff routes with part-time or transitional city letter carriers to ensure mail is delivered on routes.
Postal Service Headquarters and area officials have implemented initiatives aimed at improving delivery operation performance including reducing managers’ daily administrative burdens,1 implementing new staffing tools, and improving daily communication of office operations. Moreover, area officials have primarily focused on increasing route efficiency and reducing overall workhours. However, management has not fully developed an overall city delivery operations strategy that optimizes resources and focuses on the type of workhours used and the associated staff costs to deliver the mail on city routes. See Appendix B for our detailed analysis of this topic.
By not optimizing all city carrier staffing resources, the Postal Service unnecessarily incurred excess costs of over $153 million in FY 2008 and approximately $122 million in FY 2009. Additionally, operating costs of more than $275 million could be reduced over a 2 year period (FYs 2010 and 2011). See Appendix C for our monetary impact calculations.
We recommend the vice president, Delivery and Post Office Operations:
1. Collaborate with area management to develop and implement an overall city delivery operations strategy that optimizes the most cost-effective combination of full-time, part-time, and transitional city carrier resources to reduce overtime workhours and costs.