The U.S. Postal Service leases about 9,000 trailers nationwide for operations. It procures trailers to meet local transportation needs and assigns them to specific facilities. Each Postal Service area is responsible for trailer use and requirements. As of September 2014, 3,021 trailers were leased in the Northeast Area. Our objective was to assess the use of leased trailers in the Northeast Area.
What The OIG Found
Opportunities exist for the Northeast Area to improve management of leased trailers, return unneeded trailers, and reduce costs. The Postal Service stated the Northeast Area returned about 700 unneeded leased trailers to suppliers in fiscal years (FY) 2013 and 2014. However, from a total population of 3,575 leased trailers in FY 2013 and 3,021 in FY 2014, we found on average another 999 trailers and 810 trailers, respectively were underused.
We concluded these trailers were underused because the Postal Service did not comply with the guidance for showing a trailer is needed, which is at least one trailer move every 7 days (or four moves per month). Of the 999 underused trailers in FY 2013, 82 percent never moved and 18 percent moved one to three times per month, on average. Of the 810 trailers underused in FY 2014, 81 percent never moved and 19 percent moved one to three times per month, on average.
These conditions occurred because the Postal Service did not have controls or procedures to require local officials to assess needs for leased trailers based on use and return unneeded trailers to suppliers. Further, the Postal Service did not have an effective inventory system for recording, monitoring, and tracking leased trailers.
As a result, the Northeast Area incurred unnecessary trailer lease costs of about $3.5 million in FY 2013 and $2.8 million in FY 2014. Further, it could avoid about $2.8 million annually for 2 years if it were to return unneeded trailers.
In FY 2015, the Postal Service issued a new trailer lease policy and began developing requirements for a trailer management module in its Solutions for Enterprise Asset Management application to help manage leased trailers. The module, when fully implemented, will document receipt of, help monitor movement of, and track the return of trailers. The scheduled completion date is May 2016.
What The OIG Recommended
We recommended management enforce new leased trailer policies, thoroughly assess trailer needs, return unneeded leased trailers to suppliers, and promptly finish implementing the Solutions for Enterprise Asset Management application for managing and tracking leased trailers nationwide.