Background

The U.S. Postal Service is redesigning its processing network with the goal of creating a best-in-class mail and package processing network as part of its 10-year strategic Delivering for America plan. The Postal Service plans to create a modernized network based around Regional Processing and Distribution Centers (RP&DC), local processing centers, and sorting and delivery centers. The Richmond Processing and Distribution Center became the first RP&DC, in July 2023, consolidating operations from nearby facilities. According to the Postal Service, the effectiveness of these new facilities is critical to the success of its strategic initiatives.

What We Did

Our objective was to assess the operational impacts related to the launch of the RP&DC and identify successes, lessons learned, and opportunities.

What We Found

While the Postal Service had successes when implementing its first RP&DC, it also faced many challenges and identified many lessons learned. The challenges caused the Postal Service to incur additional labor and transportation costs, totaling over $8 million in questioned costs over the first four months of operations. The challenges also contributed to a decrease in service performance for the Richmond region that continued four months after launch.

We identified the following opportunities for the Postal Service to improve performance in the region and during implementation of future RP&DCs: reviewing facilities for pre-existing issues that could impact a successful rollout; including service performance as a measure of success; ensuring transportation schedules are aligned to operations and facilities adhere to the operating plans; and communicating more effectively with local management.

Recommendations

We made 10 recommendations to management that include: continuing to identify and address issues post launch; developing procedures to mitigate challenges before launch; coordinating the training for local managers to understand roles and responsibilities, engagement, leadership, and adequate supervision of operations; adopting a service performance measure of success; aligning and validating transportation schedules; recovering overpayments; establishing a process to communicate and solicit feedback from all local managers in the RP&DC region; updating its Mail Processing Facility Review policy; and communicating impacts to communities when moving processing operations for an entire 3-digit ZIP Code to another facility.

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Source: USPS OIG