Project Title: Capping Review – Consolidation of Mail for Network Distribution Centers
Start Date: Tuesday, December 5, 2017
Estimated Report Release Date: May 2018

The Postal Service has 21 network distribution centers (NDCs), which consolidate mail processing and dispatch to increase operational efficiency. At 19 of the NDCs, there are Consolidation Deconsolidation Facility (CDF) contractors that provide bedloading and recontainerization services for the Postal Service.

Bedloading involves consolidating mail into a single trailer when the combined mail contents of trailers exceeds the floor space of one trailer. Recontainerization occurs when CDF contractors deconsolidate inbound long-haul trailers containing bedloaded mail from other CDFs.

In our previous audits of five CDFs, we found that Postal Service NDC personnel were automatically sending trips based on the contract schedule even though they did not require bedloading or recontainerization. As a result, we concluded that the Postal Service unnecessarily incurred contractor costs.

The Postal Service disagreed because the CDF contracts are fixed-priced with established schedules and believe that they are saving money by consolidating trips at the CDFs. However, USPS has the right to conduct periodic operational inspections on a scheduled or unscheduled basis to ensure contract compliance, and the CDF contracts allow the Postal Service to cancel or modify operations with seven days’ notice to the supplier.

• How can the Postal Service perform the consolidation/deconsolidation activities at the NDCs in lieu of utilizing contractors for this service?

Source: USPS Office of Inspector General