Audit Report – NO-AR-15-003 – 01/22/2015
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Background
The U.S. Postal Service has 21 network distribution centers (NDC) linked by a dedicated transportation network. NDCs are primarily responsible for sorting and transporting bulk mail — Standard Mail, Periodicals, and Package Services. Our objective was to evaluate the efficiency of the Chicago, IL, NDC’s mail processing and transportation operations. This report is one in a series and also addresses related operations and transportation at the Des Moines, IA, and Pittsburgh, PA, NDCs.
What The OIG Found
Opportunities exist to improve the efficiency of some operations at the Chicago NDC. The Chicago NDC did not attain the average productivity of comparable NDCs. Specifically, we found the Chicago NDC’s parcel sorter machines and sack sorter operations were inefficient and determined the facility used more workhours in mailhandler operations than necessary. As a result, the Chicago NDC could eliminate 119,572 workhours from its mail processing operations.
We also found some mail transport equipment with unused space, equipment not properly restrained for transport, and some trailers from the Chicago NDC headed to Pittsburgh and Des Moines NDCs were not filled to capacity. These Highlights conditions occurred because officials did not properly staff operations based on mail volume and did not have the latest technology installed on parcel sorter machines to automate parcel distribution. In addition, the Powered Industrial Vehicle Management System used for tracking motorized equipment was not working; and employees did not fully use the Yard Management System to ensure efficient trailer yard moves or follow NDC guidelines for properly sorting, labeling, and consolidating mail. Further management did not review its highway contract route transportation requirements. The Postal Service could save about $5.6 million annually by eliminating unnecessary workhours, ensuring compliance with NDC guidelines, and eliminating three underutilized transportation round trips.
What The OIG Recommended
We recommended the vice president, Great Lakes Area, instruct the Chicago NDC to eliminate 119,572 workhours at the Chicago NDC by evaluating staffing and scheduling installing singulate, scan, and induction equipment on parcel sorter machines; repairing and using the Powered Industrial Vehicle Management System; and fully using the Yard Management System to assign trailers to dock doors. We also recommended the vice presidents, Great Lakes, Eastern, and Western areas, reinforce compliance with NDC guidelines, remove unnecessary transportation, and reinforce existing safety procedures for restraining mail transport equipment.