Audit Report – NO-AR-14-010 – 09/05/2014
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Background
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.
Union and NAME of Local/Branch
Cape Girardeau Area Local 4088
I am immediately suspicious of the OIG findings of reduced throughput on the APBS. I have to wonder if they aren’t experiencing the same situation we are in Cape Girardeau.
Our local management has been understaffing the APBS operation, leaving the APBS machine sitting idle for days at a time. The folks that would normally run the APBS are being used to fill in for the management-created shortage areas in our DBCS operations. Overtime is down, so bonuses are probably healthy, even though the man hours in our associate offices are spiking. The parcels we used to sort on our APBS have been drastically reduced due to the parcels being ran at the Hazelwood, MO NDC. The problem is that those parcels aren’t being separated and STAR Routed. What we are seeing is 6 Gaylord boxes or more being sent nightly to Park Hills, MO, with all of the towns that are STAR Route serviced by that Post office being mixed into the same box. This requires that those parcels must be sorted manually in that office. How is this cost productive? How is this operationally efficient? Park Hills is just one example of at least 4 other hub offices that these manual operation man hours are being created in, but Park Hills sees the most volume of once automation-processed mail, turned manually sorted mail.
Even Western Area acknowledges that the sudden and drastic drop in throughput volume is irregular.