Audit Report – NO-AR-14-010 – 09/05/2014
The U.S. Postal Service continues to aggressively cut costs. To that end, it is consolidating the mail processing network to align it with reduced mail volume and a smaller workforce.
This report responds to a congressional request from Senator Carl Levin of Michigan to review the Postal Service’s proposed move of the Automated Parcel and Bundle Sorter (APBS) machine from the Lansing, MI, Processing and Distribution Center (P&DC) to the Grand Rapids, MI, P&DC.
The APBS performs the primary function of receiving small parcels, bundles, and irregular parcels and sorting them based on their postal code into as many as 200 separate output locations.
Our objective was to determine whether a business case exists for moving the APBS from the Lansing P&DC to the Grand Rapids P&DC.
What The OIG Found
A business case exists to support moving the APBS from the Lansing P&DC to the Grand Rapids P&DC. The overall cost savings will be about $1.8 million in the first year, and about $1.9 million annually in subsequent years.
The Lansing P&DC is not fully utilizing the APBS and transferring it will give the Grand Rapids P&DC more machine capacity to process the large volume of mail being processed manually.
In addition, the Grand Rapids P&DC needs an additional APBS due to increased volume. For the period October 1, 2013, through March 31, 2014, the Lansing P&DC APBS mail volume declined 20 percent compared to the same period last year. Conversely, the APBS mail volume at the Grand Rapids P&DC increased 54 percent compared to the same period last year. In addition, if the APBS is transferred, the Lansing P&DC plans to reassign the 25 employees working on the APBS to other mail processing operations within its facility.
What The OIG Recommended
We recommended the vice president, Network Operations, transfer the Lansing P&DC’s APBS to the Grand Rapids P&DC.