Background

The Birmingham P&DC is in the Alabama District of the Southern Area. During fiscal year (FY) 2019, it manually processed 50.8 million letters, 5 million flats, and 855,000 parcels. Mail is processed manually when its dimensions or address quality prevent it from being processed on mail processing equipment. It is much more cost effective to process mail on mail processing equipment rather than manually. In FY 2019, the national average productivity for flats processed on mail processing equipment was 1,980 mailpieces per hour while national average productivity for manually processed flats was 332 mailpieces per hour.

We selected the Birmingham P&DC for review based on our analysis of manual flats productivity as measured by the Management Operating Data System (MODS). The Postal Service uses MODS data to plan workload, forecast workhours and mail volume, track mail processing activities, evaluate the efficiency of facilities, and estimate staffing requirements. In addition to its operational uses, the Postal Service uses MODS workhour data to calculate totals for many of the cost pools within the Clerks and Mail Handlers Cost Segment.

Postal Service management and the Postal Regulatory Commission rely on accurate and precise product cost estimates to set postal prices and to reliably determine whether revenue for products and mail classes covers attributable costs. The Birmingham P&DC’s FY 2019 manual flats productivity of 100 mailpieces per hour was significantly lower than the national average productivity of 332 mailpieces per hour.

Our objective was to assess manual flats processing operations at the Birmingham P&DC.

• Finding #1: Manual Flats Processing Volume and Workhours
  The Birmingham P&DC’s manual flats processing volume recorded in MODS did not correspond with the volume of manual flats processed during our observations. Specifically, on Monday January 6, we observed 65,400 manual flats processed at the Birmingham P&DC while the average manual flats volume recorded in MODS for Mondays during 2019 was only 15,462.

• Finding #2: Operating Plan
  We found that the Birmingham P&DC’s operating plan did not reflect current mail processing operations. Specifically, the operating plan dated October 2016 did not match clearance times for the manual flats processing operation as shown in the End of Run Report and the Run Plan Generator (RPG).

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Source: USPS Office of Inspector General