A lot is going on with the United States Postal Service (USPS): A Congressional committee is considering the most comprehensive reform in 30 years, a new postmaster general began work June 1 and the second increase in postal rates this year angered scores of large-volume mailers.
Locally, another audit has identified mail-sorting problems at the Bulk Mail Center (BMC) in Sharonville. A three-page audit conducted in late March by a Breakthrough Productivity Initiative team — a special cost-cutting team headed by a non-postal worker — confirmed some of what former BMC employee Gary Joseph told CityBeat (see Going Postal).
Joseph said the bulk mail center — one of 21 across the country that handle everything but letters — routinely reprocesses mail because of imperfect machinery, an imperfect routing system and imperfect management.
On one hand, considering the USPS’ size, it’s impressive it works as well as it does. The agency’s nearly 900,000 full and part-time employees delivered more than 207 billion pieces of mail in 2000. By comparison, Federal Express delivers about 1.3 billion shipments each year.
But USPS is under serious pressure to cut costs without cutting service after announcing it expects to lose $3 to $5 billion this year.
This bigger-than-expected loss puts the agency at risk of hitting the $15 billion legal limit it can borrow from the U.S. Treasury by the end of 2002; at the end of 2000, it had borrowed $9.3 billion.
As a result, in April the U.S. General Accounting Office (GAO) — Congress’ auditing arm — placed USPS on its list of high-risk agencies, meaning it needs immediate and long-term plans to address financial problems.
In May, the House Committee on Government Reform asked USPS to make its financial reports more transparent and devise a plan to become more efficient, according to Bernard Unger, the GAO’s director of physical infrastructure. Details were due June 25, but hadn’t been received.
Earlier this year postal managers floated the idea of cutting Saturday service and closing post offices. This was prohibited by the last major legal reform of USPS — the 1970 Postal Reorganization Act — which made the postal service an independent agency expected to break even each year.
Substantial postal reform stalled in Congress in 1999, but its main backer, U.S. Rep. John McHugh (R-NY), has been joined by U.S. Rep. Dan Burton (R-IN), chair of the House Committee on Government Reforms. Both the Senate and the House are interested in doing something on reform this year, according to Unger. Burton has said postal reform is one of his highest priorities this year.
The March BMC audit focused on verifying the volume of mail processed and the number of employee hours needed to handle it. Auditors found the daily counts accurately reflect the amount of mail on site and incoming, but found some of the center’s bar code readers were not properly aligned.
“This resulted in excessive no reads of parcels,” the audit said.
The audit pointed out the BMC’s work is troubled by the mixed sizes of mail it receives, and backups in the sorting process leads parcels to be diverted into runoff bins.
Joseph said problems like these, known for years, result in 1,000 pieces of mail being counted as 1,300. Diverted packages go back into the system and are double and triple counted. On weekends when the BMC is busy, managers put trucks of mail outside, then process them in the next couple of days, leading to more double counting, Joseph said. If there’s not enough mail to justify the number of employees on duty, managers dump mail back into the system, according to both Joseph and Gary Stern, branch president of the National Postal Mail Handlers Union local 304.
This is important because annual management bonuses are based in part on productivity, which is measured as the total cost of processing mail divided by the volume of mail handled. The USPS paid about $2.1 million in incentive pay in 2000.
The March audit also states management has taken steps to correct many of these problems. Bonni Manies, spokesman for the USPS Cincinnati district, said more employees have been placed on the sorting issue, and technicians are watching the bar code scanners more closely.
Joseph is skeptical.
“Nothing’s changed for the last decade that I know of,” he says.
A 1998 audit by the Office of the Inspector General (OIG) identified related problems with the BMC. Specifically, the audit didn’t “substantiate the allegation of intentionally inflated manual mail volume counts,” but did confirm that “opportunities exist to improve counting and reporting procedures.” The audit said BMC supervisors “were often unaware of how volume counts were captured and reported … As a result, personnel misstated manual volume counts by 13 percent.”
That audit recommended adding mechanical counters to conveyor belts and using databases and spread sheets to more accurately track volume. The OIG hasn’t followed up the 1998 audit because it was satisfied with management’s response, according to OIG spokesman Sandra Harding. ©
This article appears in Jul 4-10, 2001.