Audit Report – NO-AR-14-011 – 09/12/2014
The U.S. Postal Service has 21 network distribution centers (NDC) linked by a dedicated transportation network. NDCs are responsible for sorting and transporting bulk mail — Standard Mail, Periodicals, and Package Services.
Our objective was to evaluate the efficiency of the Cincinnati, OH, 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 and feeder processing facilities.
What the OIG Found
Opportunities exist to improve the efficiency of some operations at the Cincinnati NDC by better managing workhours and processing more mailpieces per hour. The Cincinnati NDC had an average piece per hour productivity of 112 for its distribution operations, while comparable NDCs had an average piece per hour productivity of 186. In addition, the Cincinnati NDC used a higher percentage of workhours for other operations than comparable NDCs. Consequently, the Cincinnati NDC used 51,352 more workhours than necessary.
We also found some mail being unnecessarily transported from the Cincinnati NDC and unused space in some mail transport containers. In addition, some trailers transporting mail between the Cincinnati and Des Moines NDCs were not filled to capacity.
These conditions occurred because officials did not use best practices to benchmark efficiency against other NDCs; did not always follow NDC guidelines for properly sorting, labeling, and consolidating mail; and did not fully analyze existing transportation as required. If the Postal Service eliminated unnecessary workhours, it could save an average of about $2 million in labor costs annually. In addition, it could save about $473,000 annually in transportation costs by complying with NDC guidelines and eliminating a daily round trip.
Finally, we observed that mail transport equipment was not always properly restrained for transport to and from the NDCs as required.
What the OIG Recommended
We recommended the vice president, Eastern Area, improve the efficiency of the Cincinnati NDC’s manual operations and reduce workhours in other operations to achieve the productivity of comparable NDCs. We also recommended the vice presidents, Eastern and Western areas, reinforce compliance with NDC guidelines, remove an unnecessary highway contract round trip, and reinforce existing safety procedures for restraining mail transport equipment.