Audit Report – NO-AR-14-009 – 08/28/2014

Background
The U.S. Postal Service uses Area Mail Processing (AMP) guidelines to consolidate mail processing functions, eliminate excess capacity, increase efficiency, and better use resources. Consolidations provide opportunities for the Postal Service to operate as a leaner, more efficient organization.

This report responds to a congressional request for review of the Toledo, OH, consolidation from Congresswoman Marcy Kaptur, who represents the 9th Congressional District of Ohio. Our objectives were to determine whether a business case existed for consolidating mail processing operations from the Toledo, OH, Processing and Distribution Center (P&DC) into the Columbus, OH, and Michigan Metroplex P&DCs. We also assessed compliance with established AMP guidelines.

What the OIG Found
A business case existed to support mail consolidation from the Toledo P&DC into the Columbus and Michigan Metroplex P&DCs. The overall cost savings was $9.3 million annually, which was about $100,000 more than the Postal Service estimated. Following the consolidations productivity increased at both receiving plants, delayed mail decreased at the Michigan Metroplex P&DC but increased at the Columbus P&DC, and service scores initially decreased at both plants but have begun to rebound. Also, no career employees were laid off. The consolidations did have a negative impact on carriers, with about 28 percent more carriers returning after 5 p.m. This resulted in customers receiving their mail later, as well as an increased risk to carriers’ safety.

What the OIG Recommended
We recommended the vice president, Network Operations, re-evaluate cost savings to include additional transportation and maintenance costs, update data as necessary, and adjust the AMP proposal based on the post-implementation review. We also recommended the vice president re-evaluate staffing and resources at the Columbus and Michigan Metroplex P&DCs to ensure mail is timely processed and available to carriers for delivery before 5 p.m. and monitor mail processing at the Columbus P&DC to minimize mail delays.

via Document Library | Office of Inspector General.