The US Postal Service made “significant progress” in reducing the amount of delayed mail in the most recent peak mailing season, according to the USPS Inspector General.
The latest semiannual report from the IG to Congress says that in the past mailers have expressed concern about USPS performance in the autumn mailing season, but this year delayed mail declined by 56% year-on-year while service performance rose to 90.7%.
The amount of delayed mail was reduced compared to the previous fall mailing season at the Postal Service’s 43 largest mail processing and distribution centres.
The improvement came despite a widespread closure programme at USPS, as the federal agency seeks to cut its network operating costs by $3bn a year and respond to declining mail volumes.
The Inspector General’s report attributed the progress to an emphasis by management on timely processing of mail, and also the new USPS track-and-trace system, the Intelligent Mail barcode.
Some opportunities remain for fustier improvement in delayed mail rates, the IG said, suggesting that mail transportation equipment was causing congestion in mail processing plants, which could led to delays.
“Although delayed mail experienced a downward trend, any amount of delayed mail could result in revenue loss, as affected mailers and customers seek other alternatives,” the IG report noted.
The Intelligent Mail barcode (IMb) system was first introduced in January 2009 but since January 2013 has been required if mailers are to access the full business mail postage discounts available. With the IMb system the Postal Service is aiming to create 100% visibility within the mail stream by 2014, providing mailers with near real-time data on the location of mailpieces in the network.
The technology already allows USPS to identify in more detail the bottlenecks and delays in its system.
The Inspector General’s latest report to Congress sums up all audits of the Postal Service in the six months up to the end of March 2013, along with details of investigations into mail fraud and criminal cases linked to the US mail.
Within the report, the Inspector General notes the context in which the Postal Service is currently “aggressively” cutting its costs to improve its liquidity position after a year in which it recorded a $15.9bn loss as its important First Class Mail service saw a volume decrease of 834m pieces compared to the previous year.
Since 2006, USPS has already cut its annual operating costs by $15bn, reducing its career work force by 168,000 people (24%). Under new union contracts, the Postal Service is making use of more part-time labour in order to help reduce costs.
In 2013, the Postal Service decided to accelerate efforts to cut operating costs, bringing forward plant closures that had been scheduled for 2014, because Congress has continued to delay critical postal reform legislation. It also wants to renegotiate union contracts – a move opposed by unions – to cut labour costs which contribute as much as 80% of all operational expenses.
With most of the billions of dollars of USPS losses in recent years down to Congressional mandates to pre fund future healthcare liabilities, rather than from operational losses, the Postal Service cannot restore financial sustainability by operational changes alone, according to executives. Postal reforms needed include a restructuring of pension and healthcare funding arrangements and powers for USPS to broaden the range of products and services it can offer. Among proposals, USPS wants its own health insurance system independent from the Federal system.
With no guarantee that US lawmakers will provide any help this year for the Postal Service to cling to financial viability, last month 47 members of Congress wrote to the US Postmaster General Patrick Donahoe to urge him to stop the acceleration of mail plant closure plans.
The lawmakers agreed it was up to Congress to act if USPS is to sustain itself, but said it would be “inopportune” for the Postal Service to close facilities while America faces “unacceptably high” unemployment rates, and said if mail plants are closed across the country it would “severely limit” Congress’ ability to take action.
The members of Congress urged USPS to keep the mail plants originally scheduled for closure in 2014 open until 2014.