OIG Examines the Postal Service’s Embargoes and Redirects

The 2020 peak mailing season likely didn’t go as the Postal Service or its customers had expected, to say the least.

Whatever preparations the agency had made for the usual seasonal volume were severely disrupted as the global pandemic impacted employee and transportation availability, and as package volume surged in response to orders from quarantined shoppers.  USPS processing facilities strained to move volume and maintain service but, as the Postal Service and commercial mailers learned, those efforts were unsuccessful in some locations, necessitating exceptional measures to redirect or completely halt the inflow of mail.

Post mortem

The Postal Service’s Office of Inspector General has twice examined how the USPS responded to the 2020 peak season’s challenges.  In its first review, Excessive Wait Times to Accept Commercial Mail Shipments at the Cleveland Processing & Distribution Center, released last March, the OIG found that

“... delayed mail processing operations and limited employee availability resulted in facility capacity issues, which further resulted in inefficiencies and delays in processing drop shipments at the Cleveland P&DC.  The Postal Service implemented mitigating operations by limiting incoming mail drop shipments through temporary redirects to the Pittsburgh P&DC.  However, Cleveland P&DC management did not communicate the need for a redirect to Postal Service Headquarters timely and, once management implemented the temporary redirect, it was not recorded accurately in the FAST system.  Furthermore, Surface Visibility data did not reflect reported drop shipment delay conditions; therefore, media and mailer concerns about excessive wait times could not be substantiated."

The inadequate responses and poor communications by some local plant managers in several locations typically resulted in USPS HQ briefers having little or inaccurate information to share with industry representatives – who often had better reports than did the postal staffers.

In its second, broader review, Embargoes and Redirections at US Postal Service Processing Facilities, released August 13, the OIG reported on

“... temporary embargoes of up to 17 days for certain mail types at nine mail processing facilities: the Birmingham, AL Annex; West Valley, AZ processing and distribution center (P&DC); Baltimore, MD P&DC; Detroit, MI network distribution center (NDC); New Jersey (City), NJ NDC; Northwest Rochester, NY NDC; Cleveland, OH P&DC; Springdale, OH Annex; and Philadelphia, PA NDC.”

As the OIG noted:

“Package volume at these nine facilities increased by a range of 7 to 54 percent during the FY 2021 peak mailing season, which was more than the Postal Service anticipated or had the capacity to process.  Facilities that accepted more packages than they could process experienced crowded conditions on the workroom floors which became so congested that employees could not move mail between the processing equipment and loading docks. ...

“We reviewed mail processing, employee availability, mail volume, and productivity data from October 1, 2019, through February 28, 2021, at each of the nine processing facilities that imposed embargoes.  We conducted in-person observations at the Baltimore, MD P&DC, and performed virtual visits of the remaining eight facilities.”

Findings

The OIG listed several significant findings in its report:

  • “The decision to embargo or redirect mail only came after facility conditions became so congested that mail could not be processed efficiently. ... Division management was not proactive in making the decision to impose the embargoes or redirections.  Although they had regular discussions with facility management regarding congested facility conditions, division management was slow to impose embargoes or redirections at the affected facilities. 

    “Additionally, once an embargo was imposed, division management did not clearly communicate their embargo decision to local facility management. ... Facility and division management stated they had not experienced congested conditions of this nature in previous peak mailing seasons and did not have a standard process for implementing embargoes or redirections.
  • “Management was inconsistent in communicating to the affected processing facilities that embargoes or redirections had been imposed and did not announce the embargoes or redirections in enough time to allow mailers to make other transportation arrangements. ... We found mailers were notified of the embargoes or redirections for all nine processing facilities on the same day the embargoes or redirections were to take effect.  Once embargoes or redirections were imposed, mailers were still able to schedule appointments to drop mail at the affected facilities because appointments in the FAST system could not be updated to prevent appointments for embargoed mail types ... .

    “Therefore, mailers continued dispatching trucks to processing facilities that could not accommodate their mail, resulting in wait times of up to 23 hours, congested conditions in the processing facilities’ truck yards, and delayed processing of the embargoed mail.  In addition, mailers reported that their customers blamed them for delays when the Postal Service required them to redirect mail to another facility.  As a result of ineffective and untimely communications, mailers stated they lost customers and the Postal Service risked losing the trust of and damaging their business relationship with mailers.“The Postal Service did not acquire enough additional facility capacity prior to peak mailing season to receive, stage, and process the additional mail volume. ... Headquarters management stated when possible, they tried to ease congested conditions by moving packages to other facilities for processing, but trailers and drivers were not always available.
  • The Postal Service did not acquire enough additional facility capacity prior to peak mailing season to receive, stage, and process the additional mail volume. ... Headquarters management stated when possible, they tried to ease congested conditions by moving packages to other facilities for processing, but trailers and drivers were not always available.

    “During the FY 2021 peak season, actual capacity was insufficient for the number of packages the Postal Service received at some locations, and package volume overflowed into staging areas and aisles. ... The level of congestion impaired all nine of the facilities’ ability to effectively process the mail and they reached a point where employees could not move mail to the processing machines, resulting in delayed mail. 

    “Congested conditions at Postal Service processing facilities led management to direct that packages be processed and dispatched before other mail that arrived sooner.  This practice helped clear space on workroom floors to process the backlogged mail volume; however, mail was not processed in first-in-first-out (FIFO) order to meet service standards.

    “Further, processing management acknowledged they delayed marketing mail processing for several days to focus on reducing the backlogged package volume.  This led to significant delays in peak season mailings, which included mailers’ time-sensitive mail such as catalogs and holiday promotional materials.

  • “... Although consistent with the national average during FY 2020 peak season, employee availability at the nine embargoed or redirected sites was lower than the national average.  While the COVID-19 pandemic had a major impact on the Postal Service’s employee availability, insufficient internal controls over unscheduled employee absences that existed before the pandemic worsened the problem.”

Recommendations

The OIG recommended that Postal Service management:

  • “Develop, document, and implement standard operating procedures to improve communications about major disruptions in service across the division and processing facility levels of management.
  • “Develop a plan to promptly communicate information about major service disruptions to mailers so they can adjust their operations as needed.
  • “Develop a plan to identify facilities at risk of having their volume exceed processing and staging capacity and alleviate those conditions before they affect mail processing during peak season.
  • “Develop a plan to verify that mail is processed in FIFO order during high volume periods to ensure that it will meet its service standards.
  • Strengthen internal controls over employee absences to ensure adequate employee availability during peak season.”

The OIG noted that USPS management

“... partially agreed with recommendations 1 and 2, agreed with recommendations 3 and 5, and disagreed with recommendation 4.  Subsequent to the Postal Service submitting its official comments, management stated that they agreed with our findings.”

Observations

Heading into the upcoming peak season, the Postal Service has been publicizing that it’s better prepared than it was last year, emphasizing its acquisition of additional space, installation of additional processing equipment, and recruitment of additional seasonal workers.

However, at the same time, the agency is lowering its service standards, revising its transportation network to move more mail by truck, reactivating its facility consolidation program, and facing a shift in mail mix as package volume ebbs.

Separately, and beyond the control of the USPS or anyone else, the pandemic is far from over and resurgences of the virus – and its impact on complement – cannot be prevented.  At the same time, the shortage of trucks, and especially drivers, has not abated, posing a challenge to an agency relying on surface transportation more than ever.

More critically, it’s less clear how the human factor will be different.  The Postmaster General’s reorganization of the Postal Service’s management structure continues to ripple through; plant and division managers may be in different jobs but they’re still the same people.  Similarly, the employee complement at facilities is largely the same, albeit with the addition of temporary seasonal help, and there’s no reason to expect a change in worker performance; it’s the craft employees that do the work.

Regardless, for better or worse, we’ll know soon enough how the agency’s peak season goes this year.

 

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