Page 1 GAO-14-828R Postal Delivery
441 G St. N.W.
Washington, DC 20548
September 26, 2014
The Honorable Thomas R. Carper
Chairman
Committee on Homeland Security and Governmental Affairs
United States Senate
The Honorable Heidi Heitkamp
United States Senate
The Honorable Jon Tester
United States Senate
U.S. Postal Service: Information on Recent Changes to Delivery Standards, Operations, and
Performance
Since 2012, the United States Postal Service (USPS) has instituted several initiatives aimed at
reducing expenses in its mail delivery and processing networks as part of broader efforts to
address its fiscal challenges and move toward financial viability.
1
These initiatives included
changing the mail delivery standards
2
for some types of mail and then consolidating many mail
processing operations and facilities.
3
For example, before some of the delivery standards
changes became effective in July 2012, the delivery standard for a single-piece letter sent by
First-Class Mail from Minneapolis to Chicago was 2 days.
4
1
In July 2009, GAO added USPS’s financial condition to the list of high-risk areas needing attention by Congress and
the executive branch to achieve broad-based restructuring. Subsequently, GAO retained USPS on the high-risk list
in fiscal year 2011 and fiscal year 2013. GAO, High-Risk Series: Restructuring the U.S. Postal Service to Achieve
Sustainable Financial Viability,
With the delivery standards change,
it became 3 days. This report updates information that you requested and that we initially
provided to your staff on July 9, 2014. The briefing slides in enclosure I describe (1) changes to
GAO-09-937SP (Washington, D.C.: July 28, 2009); High-Risk Series: An Update,
GAO-11-278 (Washington, D.C.: February 2011); High-Risk Series: An Update, GAO-13-283 (Washington, D.C.:
February 2013).
2
For purposes of this report, delivery standards refer to USPS regulations and rules for determining on time delivery
of market-dominant products—which primarily include First-Class Mail (e.g., correspondence, bills, payments,
statements, and advertising); Standard Mail (mainly bulk advertising and direct mail solicitations); Periodicals (mainly
magazines and local newspapers); and some types of Package Services (primarily Alaska Bypass Mail,
Media/Library Mail, and Bound Printed Matter). See 39 CFR Part 121. USPS refers to our description of delivery
standards as “service standards.”
3
Consolidation involves combining two or more originating and/or destinating mail processing operations in a single
postal processing facility. Originating mail refers to outgoing and local mail that enters the point of origin for mail
processing. Local mail remains within the facility and is combined with destinating mail from other origin facilities.
Destinating mail refers to mail arriving at the point of entry for distribution and dispatch to a post office for delivery.
4
Single-piece letters refer to letters sent individually versus bulk letters which are generally multiple or batches of
letters mailed at the same time by commercial mailers. USPS will implement further changes to the delivery
standards on January 5, 2015.
Page 2 GAO-14-828R Postal Delivery
delivery standards starting in 2012 and how they affected the number of days it takes for mail to
be delivered, (2) operational changes USPS has made starting in 2012 and how these may
have affected delivery time, and (3) trends in delivery performance starting in fiscal year 2011.
To conduct this performance audit, we reviewed USPS’s rules and regulations that define its
delivery standards and operational changes. We reviewed relevant reports from USPS and the
Postal Regulatory Commission (PRC) as well as USPS’s Federal Register notices about its
operational changes and changes to delivery standards for market-dominant products. We used
mail delivery performance and mail volume data provided by USPS to analyze performance
trends. We compared the data before and after delivery standard changes, from fiscal years
2011 through the third quarter of fiscal year 2014, at the national level, and for one rural
(“Dakotas”) and one urban (“Chicago”) postal district. The two districts for which we analyzed
data were selected on a judgmental basis. Therefore, the results cannot be generalized across
all postal districts. The data on delivery performance for bulk First-Class Mail, Standard Mail,
and Periodicals are limited to mail pieces tracked with barcodes that meet certain USPS
business rules. These performance data are not from a random sample and therefore may not
be representative of all mail. However, they are the only available delivery performance data for
these types of mail. We assessed the reliability of the data through a review of related
documents, such as written responses from USPS. We found these data sufficiently reliable for
the purposes of this report. A detailed discussion of our scope and methodology, including the
limitations of the data included in this report, is included in enclosure II.
We conducted this performance audit from April 2014 to September 2014 in accordance with
generally accepted government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives.
In summary, we found:
• Revised delivery standards have increased delivery time for some First-Class Mail and
Periodicals, notably by reducing mail with a 1-day standard. USPS revised its 1-day delivery
standard for First-Class Mail to maintain the 1-day delivery standard for intra-Sectional
Center Facility (SCF) mail, but not for inter-SCF mail. SCFs serve as the processing and
distribution centers for post offices in a designated geographic area as defined by the first
three digits of the ZIP Codes of those offices. Intra-SCF mail refers to mail that originates
and destinates within the range of 3-digit ZIP Code areas assigned to the same SCF, while
inter-SCF refers to mail that originates or destinates outside those range of 3-digit Zip Code
areas. USPS also revised its delivery standards for 2-day delivery. Mail must now be within
a 6-hour drive between the applicable processing facilities rather than within a 12-hour drive
time to meet the 2-day delivery standard; mail sent outside the 2-day delivery area shifted to
a 3-day delivery standard. USPS estimated that about one quarter of First-Class Mail
volume was affected by the changes in delivery standards. Further, the percentage of
single-piece and bulk First-Class Mail with a 1-day delivery standard decreased from 2012
to 2014, while the percentage with a 3-5 day delivery standard increased.
5
5
First-Class Mail delivered within the 48 contiguous states has a 3-day delivery standard, while First-Class Mail
delivered from the 48 contiguous states to the noncontiguous states, Puerto Rico, the U.S. Virgin Islands, or Guam
has a 4-5 day delivery standard.
USPS also
Page 3 GAO-14-828R Postal Delivery
eliminated 1-day delivery standards for end-to-end
6
• USPS’s changes in delivery standards enabled it to make significant operational changes,
including closing some mail processing facilities. USPS stated that as a result, there are
fewer facilities,
Periodicals, which generally shifted to a
2-day standard.
7
• National delivery performance trends between the beginning of fiscal year 2011 and the
third quarter of fiscal year 2014 varied for the following types of mail: First-Class Mail,
Standard Mail, and Periodicals (see app. II for detailed performance data). National
performance for single-piece First-Class Mail with 1-day, 2-day, and 3-5 day delivery
standards was generally improving until the second quarter of fiscal year 2013, then leveled
off or declined, with 3-day performance declining throughout fiscal year 2014. National
delivery performance for bulk First-Class Mail with 1-day, 2-day, and 3-5 day delivery
standards improved in fiscal 2012, but generally declined throughout fiscal year 2014.
Generally, performance for four types of Standard Mail improved with exceptions in the third
quarter of fiscal year 2013 and the second quarter of fiscal year 2014 when all four types
declined. National delivery performance for Periodicals has fluctuated in recent years
(ranging from about 69 percent on-time delivery in fiscal year 2012 to 82 percent in fiscal
year 2013), with the most recent performance levels similar to those in fiscal year 2011
(about 80 percent so far in fiscal year 2014 to 76 percent in fiscal year 2011).
and less need to rely on air transportation of mail between facilities to meet
the 2-day delivery standard. As a result, USPS shifted long-distance transportation of some
mail from air to surface transportation. Also, USPS moved the deadline, referred to as the
Critical Entry Time (CET), for entering some bulk business mail to earlier in the day; mail
entered later than the CET could be processed that same calendar day or the following day.
In addition, USPS took actions intended to balance its workload, notably by increasing the
delivery time of some Standard Mail from 3 to 4 days.
8
GAO is not making any recommendations in this report.
Agency Comments
We provided a draft of this report to the USPS for comment. USPS provided a written
response, which is reproduced as enclosure III to this letter. USPS also provided technical
comments, which we incorporated as appropriate. In its comments, USPS discussed two points
we made in our draft report. First, USPS noted that our analysis of two postal districts is not
representative of performance, service areas, and delivery standards across all postal districts.
We agree and stated in our scope and methodology that the performance results of these two
6
End-to-end mail is mail that USPS processes through its entire network, as opposed to “destination-entered” mail
that bypasses most of USPS’s processing network for entry at a USPS facility closer to the mail’s final destination.
7
Based on the new delivery standards, USPS reported that it reduced the number of mail processing facilities by 141
in 2012 and 2013, from 461 to 320 facilities.
8
A variety of factors can affect delivery performance, such as operational changes and efficiency; however, we did
not analyze these factors in our review. According to USPS, quarters 1 and 2 of each fiscal year generally have lower
delivery performance scores than quarters 3 and 4 of the same fiscal year and the delivery performance score for the
entire fiscal year due to increased volumes and inclement weather. USPS specifically noted that inclement weather
negatively affected delivery performance during quarters 1 and 2 of fiscal year 2014.
Page 4 GAO-14-828R Postal Delivery
districts cannot be generalized across all postal districts. Second, USPS cautions against
drawing conclusions based on comparisons of recent performance, specifically the first two
quarters of fiscal year 2014, due to the severe winter weather experienced during that period.
We noted in our report that a variety of factors can affect delivery performance, such as
operational changes and efficiency; however, we did not analyze these factors in our review. As
our third objective states, we provided information on trends in national-level delivery
performance using the performance data that USPS publicly reports on a quarterly basis from
fiscal year 2011 to the third quarter of fiscal year 2014.
----
We are sending copies of this report to the USPS and other interested parties. In addition, the
report will be available at no charge on GAO’s website at http://www.gao.gov.
If you or your staff has any questions about this report, please contact me at (202) 512-2834 or
[email protected]. Contact points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. Key contributors to this report were Teresa
Anderson (Assistant Director), Samer Abbas, Swati Deo, Kenneth John, Thanh Lu, John
Mingus, Joshua Ormond, Kelly Rubin, Lorelei St. James, and Crystal Wesco.
Phillip R. Herr
Managing Director
Physical Infrastructure Issues
Enclosures - 3
Enclosure 1
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U.S. POSTAL SERVICE:
Information on Recent Changes to Delivery
Standards, Operations, and Performance
Information for the Committee on Homeland
Security and Governmental Affairs, United
States Senate
Enclosure I
Enclosure 1
Page 6 GAO-14-828R Postal Delivery
Introduction
• The U.S. Postal Service (USPS) is expected to provide prompt,
reliable, and efficient nationwide service while remaining self-
supporting, but it is facing serious fiscal challenges, with insufficient
revenues to cover its expenses and finance needed for capital
investments.
• Since July 1, 2012, USPS has undertaken several initiatives aimed
at reducing expenses in its mail delivery and processing networks
as part of broader efforts to improve its financial position
.
• USPS initiatives have involved changing its delivery standards to
increase the expected number of days that it can take to deliver
some types of mail, consolidating mail processing facilities, and
realigning its operations to capture potential savings.
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Enclosure 1
Page 7 GAO-14-828R Postal Delivery
Introduction
• USPS’s mail processing network within the contiguous 48 states is configured primarily so that
USPS can meet its First-Class Mail delivery standards within 1 to 3 days.
• Total mail volume has declined 55 billion pieces from its peak of 213 billion pieces in fiscal year
2006—a 26 percent decline.
• First-Class Mail volume has declined 38 billion pieces—a 36 percent decline—since it
peaked in fiscal year 2001 at nearly 104 billion pieces.
• In response to declines in mail volume and revenue, in May 2012, USPS announced a two-phase
plan to consolidate its mail processing operations and network.
•
In phase one, effective July 1, 2012, USPS changed its delivery standards, which USPS
reported enabled it to significantly reduce the number of mail processing facilities.
•
In phase two (scheduled to begin January 5, 2015), single-piece First-Class Mail will no
longer be subject to a 1-day delivery standard and USPS plans to further reduce the number
of mail processing facilities by up to 82 facilities, from 320 to as few as 238.
• After phase two implementation, USPS projects 20 percent of First-Class Mail will be
delivered in 1 day, 35 percent in 2 days, and 44 percent in 3 days.
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Enclosure 1
Page 8 GAO-14-828R Postal Delivery
Objectives
In this report, we describe
1. changes to delivery standards starting in 2012 and how they
affected the number of days it takes for mail to be delivered
(i.e., delivery time),
2. operational changes USPS has made starting in 2012 and
how these changes may have affected delivery time, and
3.
trends in delivery performance starting in fiscal year 2011.
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Enclosure 1
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Methodology
• We reviewed USPS regulations that define its delivery standards, information on
USPS operational changes, and available data on USPS delivery performance.
We conducted this work from April through September 2014.
• To describe changes USPS made to its delivery standards, we reviewed
relevant documents, including Federal Register notices, USPS regulations,
annual reports and other documents issued by USPS and the Postal
Regulatory Commission (PRC), and USPS-generated maps and data on its
delivery standards.
• To describe the operational changes USPS has made in recent years and the
impact on delivery times, we reviewed Federal Register notices, reports by
USPS and the PRC describing operational changes, and “critical entry times”
(CET), which determine when the delivery standards for mail entered at
USPS processing facilities are calculated.
• To analyze USPS performance, we obtained annual and quarterly USPS data
on mail delivery performance from fiscal year 2011 to the third quarter of fiscal
year 2014.
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Enclosure 1
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Figure 1: USPS Mail Volume and Revenue by Type
of Mail, Fiscal Year 2013
• First-Class Mail generates nearly half of mail revenue, while
Standard Mail comprises a majority of mail volume.
Background
Standard Mail
27%
Periodicals
3%
Other Mail
23%
Mail Revenue
Source: USPS. | GAO-14-828R
Bulk First-Class
Mail
26%
Standard Mail
51%
Periodicals
4%
Other Mail
3%
Mail Volume
Source: USPS. | GAO-14-828R
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Enclosure 1
Page 11 GAO-14-828R Postal Delivery
Background
• USPS mail delivery standards and performance are central to
its mission of providing postal services to all communities and
have been long-standing concerns for mailers and recipients.
• Delivery performance standards for on-time delivery of mail
enable USPS, mailers, and recipients to set realistic
expectations and organize their activities accordingly.
• Delivery performance results are used to understand what
standards are being met—information vital for management,
oversight, and accountability.
Background
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Enclosure 1
Page 12 GAO-14-828R Postal Delivery
How USPS Defines Delivery Standards
• According to USPS, delivery standards represent the level of service that USPS strives
to provide to customers.
• USPS standards for the timely delivery performance of each type of mail (delivery
standards) specify the maximum number of days for “on-time” delivery based on when
and where the mail is entered into the postal distribution system and its intended
destination.
• Mail must be received by the “Critical Entry Time” for that day to be counted
toward the number of days in the delivery standard.
• USPS has separate delivery standards for “destination-entered” bulk mail that
bypasses most of USPS’s processing network for entry at a USPS facility closer to the
mail’s final destination, and other bulk mail that is entered at a USPS facility closer to
the mail’s origination and processed “end-to-end” through the entire USPS network.
• Destination entry and end-to-end standards apply to Standard Mail (mainly
advertising), Periodicals (mainly newspapers and magazines), and Package
Services (primarily Alaska Bypass Mail, Media/Library Mail, and Bound Printed
Matter).
Background
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Enclosure 1
Page 13 GAO-14-828R Postal Delivery
Results in Brief
• Revised delivery standards have increased delivery time for some
First-Class Mail and Periodicals, notably by reducing mail with a 1-
day (overnight) standard.
• Revised delivery standards have also enabled USPS to make
operational changes including consolidating its mail processing
network, shifting some mail from air to surface transportation,
moving the last time to enter some bulk business mail to earlier in
the day, and actions intended to balance workload.
• National
delivery performance trends varied for the following types
of mail: First-Class Mail, Standard Mail, and Periodicals. For
example, national on-time delivery performance for single-piece
First-Class Mail improved until quarter 2 of fiscal year (FY) 2013,
and 3-5 day performance declined in FY 2014.
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Enclosure 1
Page 14 GAO-14-828R Postal Delivery
Objective 1: Summary
Objective 1: Describe changes to delivery standards starting in 2012 and how these changes affected
the number of days it takes for mail to be delivered.
• USPS’s revisions in delivery standards have increased delivery time for some First-Class Mail and
Periodicals, notably by reducing mail with a 1-day standard.
• USPS revised its First-Class Mail delivery standard, which increased the number of days to deliver
some First-Class Mail from 1 day to 2 days.
• USPS revised its 1-day delivery standard for First-Class Mail to maintain intra-Sectional Center
Facility (SCF) mail, but no longer include inter-SCF mail.
•
SCFs serve
as the processing and distribution center for
post o
ffices in a designated
geographic area as defined by the first three digits of the ZIP Codes of those offices. Intra-
SCF mail refers to mail that originates and destinates within the 3-digit ZIP Code areas
assigned to that SCF, while inter-SCF refers to mail that originates or destinates outside
those 3-digit ZIP Code areas.
• USPS also revised its delivery standards for 2-day delivery from a maximum of a 12-hour drive
time between mail processing plants to a maximum of 6 hours. Mail sent outside the 2-day
delivery area shifted to a 3-day delivery standard.
• About one quarter of First-Class Mail volume was affected.
• USPS eliminated 1-day delivery standards for end-to-end Periodicals; the affected mail generally shifted
to a 2-day standard.
Objective 1
Page 10
Enclosure 1
Page 15 GAO-14-828R Postal Delivery
Table 1: Key Changes in Recent Years to
Delivery Standards for Market
-Dominant Mail
• Source: USPS and Federal Register releases of final
Source: USPS and Federal Register releases of final
rules. rules.
Objective 1
Type of mail
Delivery standards
before July 1, 2012
a
Delivery standards
as of Apr.
10, 2014
Highlights of changes to standards
and
related policies and plans
First-Class Mail
1 to 3 days
1 to 3 days
The rulemaking defining the scope of 1-day (overnight) service excluded
destinations outside of the Intra-Sectional Center Facility (SCF) service area, with
affected mail generally revised to a 2-day standard.
The 2-day standard area was reduced, with affected mail revised to a 3-day
standard.
Periodicals:
destination entry
1 to 2 days
1 to 3 days
1-day and 2-day standards were revised to 3 days for mail entered at specified
facilities.
Periodicals:
end-to-
end
1 to 9 days
2 to 9 days
The 1-day (overnight) standard was eliminated and generally revised to a 2-day
standard.
Standard Mail:
destination entry
2 to 5 days
2 to 5 days
The 3-day standard was revised to 4 days for Standard Mail entered at a
Destination Sectional Center Facility (DSCF) on Friday or Saturday.
Standard Mail:
end-to-end
3 to 10 days
3 to 10 days
No changes to standards.
Package Services:
destination entry
1 to 3 days
1 to 3 days
No changes to standards.
Package Services:
end-to-end
2 to 9 days
2 to 9 days
No changes to standards.
Sources: USPS and Federal Register releases of final rules. | GAO-14-828R
a
As part of its network rationalization initiative, USPS issued revised delivery standards for First-Class Mail and Periodicals t
hat took effect on July 1, 2012. As part of its load leveling initiative,
USPS revised delivery standards for Standard Mail that took effect on April 10, 2014.
Note: Market-dominant mail is primarily First-Class Mail, Standard Mail (mainly advertising), Periodicals (mainly magazines and local newspapers), and Package Services (primarily Alaska Bypass
Mail, Media/Library Mail, and Bounded Printed Matter). Destination entry is discounted bulk mail entered at postal facilities (e.g., delivery unit or mail processing plant) that generally are closer to the
final destination of the mail; end-to-end is all other mail. Sectional Center Facilities (SCFs) are mail processing plants responsible for distribution of letters, flats, and small packages. The delivery
standards presented in this figure apply to mail sent within the contiguous 48 states and the District of Columbia.
Page 11
Enclosure 1
Page 16 GAO-14-828R Postal Delivery
USPS Downgraded Delivery Standards for
About One-Quarter of First
-Class Mail
• Delivery standards are downgraded when USPS
increases the number of days it can take to deliver mail
on time; they are upgraded when USPS decreases the
number of days.
• According to USPS estimates, 28 percent of all First-
Class Mail volume was downgraded due to changes in
delivery standards on or after July 1, 2012, while about
1 percent was upgraded, and the remaining 71 percent
was unchanged.
a
Objective 1
a
See enclosure 2 for more detail on these estimates and their limitations.
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Enclosure 1
Page 17 GAO-14-828R Postal Delivery
Table 2: Delivery Standards for Single-
Piece and Bulk First-Class Mail Volumes
• According to USPS, the percentage of single-piece and bulk First-Class Mail
volumes with 1-day delivery standards decreased from fiscal year 2012 to
fiscal year 2014, while the percentage with 3-5 day standards increased.
Objective 1
Source: USPS. | GAO-14-828R
a
According to USPS, these EXFC volume data simply represent the volume of mail measured by delivery standard. Because the statistical design for the EXFC study is
destination based to manage the statistical precision of district level scores, the volume of mail measured to each district is similar. Thus, according to USPS, the measured
volume information should not be used for inferences about real mail volumes.
b
According to USPS, these iMAPS volume data represent the measured volume for each quarter. Mailer adoption of Full-Service Intelligent Mail has not necessarily been
random or geographically representative of the origin points of mail. Thus, according to USPS, the volume information should not be considered to be in proportion to total
presort mail volumes.
Note: The second quarter of fiscal year 2012 was the quarter that preceded USPS changes in delivery standards for First-Class Mail. Data for First-Class Mail Flats and
Parcels are not shown in this table. See enclosure II for more detail on these estimates and their limitations.
Type of First-Class Mail measured
Volume of mail (percentage)
by fiscal year (FY) and quarter
FY 2012 Q2
FY 2014 Q2
Change
Single-piece letters and cards: Test mail pieces
created for the External First-Class Mail
Measurement System (EXFC)
a
1-day standard
45
35
-10
2-day standard
24
26
2
3-5 day standard
31
39
8
Total
100
100
N/A
Bulk (presort) letters and cards: Actual mail pieces
tracked by the Intelligent Mail Accuracy and
Performance System (iMAPS)
b
1-day standard
15
10
-5
2-day standard
32
23
-9
3-5 day standard
53
67
14
Total
100
100
N/A
Page 13
Enclosure 1
Page 18 GAO-14-828R Postal Delivery
Figure 2: Example of Change in Delivery
Standards for First-Class Mail: Helena, MT
• Standards for First-Class Mail originating from Helena (596 3-digit ZIP Code).
• Scope of 1-day (blue) and 2-day (red) delivery standard areas decreased; the 3-day
(green) delivery standard area increased.
Objective 1
Page 14
Enclosure 1
Page 19 GAO-14-828R Postal Delivery
Figure 3: Example of Change in Delivery
Standards for First-Class Mail: Bismarck, ND
• Standards for First-Class Mail originating from Bismarck (585 3-digit ZIP Code).
• Scope of 1-day (blue) and 2-day (red) delivery standard areas decreased; the 3-day
(green) delivery standard area increased.
Objective 1
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Enclosure 1
Page 20 GAO-14-828R Postal Delivery
Figure 4: Example of Change in Delivery
Standards for First-Class Mail: Fargo, ND
• Standards for First-Class Mail originating from Fargo (580 3-digit ZIP Code).
• Scope of 1-day (blue) and 2-day (red) delivery standard areas decreased; 3
-day
(green) delivery standard area increased.
Objective 1
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Enclosure 1
Page 21 GAO-14-828R Postal Delivery
Figure 5: Example of Change in Delivery
Standards for First-Class Mail: Kalispell, MT
• Standards for First-Class Mail originating from Kalispell (599 3-digit ZIP Code).
• Scope of 1-day (blue) and 2-day (red) delivery standard areas decreased; the 3-day
(green) delivery standard area increased.
Objective 1
Page 17
Enclosure 1
Page 22 GAO-14-828R Postal Delivery
Figure 6: Example of Change in Delivery
Standards for First-Class Mail: Chicago, IL
•
Standards for First
-
Class Mail originating from Chicago (606 3-digit ZIP Code).
• Scope of 1-day (blue) and 2-day (red) delivery standard areas decreased; 3-day
(green) delivery standard area increased.
Objective 1
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Enclosure 1
Page 23 GAO-14-828R Postal Delivery
Objective 2: Summary
Objective 2: Describe operational changes USPS has made starting in 2012
and how these changes may have affected delivery time.
• USPS’s changes in delivery standards enabled it to make significant
operational changes, including closing some mail processing facilities.
• USPS stated that as a result, there are fewer facilities, and less need to
rely on air transportation of mail between facilities to meet the 2-day
delivery standard. Thus, USPS shifted long-distance transportation of
some mail from air to surface transportation.
• USPS moved the deadline for entering some bulk business mail, referred to
as the Critical Entry Time (CET), to earlier in the day; mail entered later than
that time could be processed that same calendar day after the CET or the
following day.
• USPS took actions intended to balance its workload, notably by increasing
the delivery time of some Standard Mail from 3 to 4 days.
Objective 2
Page 19
Enclosure 1
Page 24 GAO-14-828R Postal Delivery
Operational Change: USPS Phase 1
Consolidation of Its Mail Processing Network
•
Effective July 1, 2012, USPS changed several delivery standards
as part of its Phase
1
plan to modernize its mail processing
network.
• USPS stated that its network rightsizing was based on current
and expected future mail volumes (an increase in Packages
and a decrease in First-Class Mail and Periodicals volumes).
• USPS added that since most First
-Class Mail and some
Periodicals would no longer be subject to a 1-day delivery
standard, USPS could meet its delivery standard with fewer
mail processing facilities.
• Based on the new delivery standards, USPS reported that it
reduced the number of mail processing facilities by 141 in 2012
and 2013.
Objective 2
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Enclosure 1
Page 25 GAO-14-828R Postal Delivery
Table 3: Mail Processing Consolidations in the
Dakotas and Chicago Districts
• To
review examples of USPS’s mail consolidation changes in
specific geographic areas, we selected a rural (“Dakotas”) and
urban (“Chicago”) district.
Postal district and its
geographic area
3-Digit ZIP Codes
Number of mail
processing facilities in
fiscal year 2011
Facilities closed since
July 2011
Dakotas – Montana, North
Dakota, South Dakota, and
western Minnesota.
565, 567, 570-577,
580-588, 590-599
21
11
Chicago – City of Chicago
and several nearby
suburban cities.
606-608
2
0
Source: USPS.
| GAO
-14-828R
Note: See appendix I for specific facility information.
Objective 2
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Enclosure 1
Page 26 GAO-14-828R Postal Delivery
Figure 7: Dakotas District: Mail Processing
Consolidations and Remaining Plants, 2011-2015
Objective 2
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Enclosure 1
Page 27 GAO-14-828R Postal Delivery
USPS Plans More Processing Consolidations,
Which Could Further Increase Delivery Times
• On June 30, 2014, USPS announced it would make
more changes to its delivery standards, enabling
consolidation of up to an additional 82 mail processing
facilities. (USPS refers to this action as “Phase 2
network rationalization.”)
• Pursuant to the delivery standard changes that go
into effect on January 5, 2014, single-piece First
-
Class Mail will no longer be subject to a 1
-day
standard.
• USPS said it would implement Phase 2 consolidations
starting January 5, 2015, and complete them by the fall
mailing season.
Objective 2
Page 23
Enclosure 1
Page 28 GAO-14-828R Postal Delivery
Revised First-Class Mail Delivery Standards
Increased Delivery Time and Allowed USPS to Make
Transportation Changes
• According to USPS, adding a day to the delivery standards allowed it
to shift long-distance transportation of some First-Class Mail from air to
surface transportation.
• USPS explained that the new delivery standards allow for
expansion or relaxation of processing entry times and greater
reliance on less expensive and less expeditious surface
transportation between plants.
• USPS was
unable to estimate the mail volume that shifted from air
to surface transportation as a result of the July 2012 delivery
standards change, but estimated that the volume that moved from
air to surface transportation between May 2012 and September
2012 reduced annual air network costs by approximately $190,000.
Objective 2
Page 24
Enclosure 1
Page 29 GAO-14-828R Postal Delivery
USPS Changes in Critical Entry Times May
Increase Delivery Time for Some Bulk Mail
• USPS moved the CET deadline for entering some bulk
business mail to earlier in the day.
• In July 2011, USPS implemented national CETs for
Periodicals and some Standard Mail ranging from 8 a.m.
to 5 p.m., depending on how they are processed.
• In July 2008, USPS implemented national CETs for
destination-entry Standard Mail (entered at facilities
that are generally closer to the final destination of the
mail) that were noon or 4 p.m., depending on mail
preparation.
•
Processing of mail entered after the CET is to occur later
the same day or on the next applicable day.
Objective 2
Page 25
Enclosure 1
Page 30 GAO-14-828R Postal Delivery
USPS Actions to Balance Workload Increased
Delivery Time for Some Standard Mail
• USPS took action to balance its workload by increasing the delivery
standard for some Standard Mail.
• On March 5, 2014, USPS finalized revised delivery standards for
some Standard Mail entered at specified mail processing
facilities near the mail’s final destination, which became effective
on April 10, 2014.
• The revisions extended delivery time from 3 days to 4 days for
this mail when it is entered on Friday or Saturday.
• USPS stated that the change will improve delivery efficiency and
reduce its traditional heavy Monday workload.
• The change may also reduce the number of USPS carriers
delivering mail after 5 p.m.
Objective 2
Page 26
Enclosure 1
Page 31 GAO-14-828R Postal Delivery
Objective 3: Summary
Objective 3: Describe trends in delivery performance starting in fiscal year 2011.
• National delivery performance trends varied for the following types of mail: First-
Class Mail, Standard Mail, and Periodicals.
• National delivery performance for single-piece First-Class Mail was generally
improving until quarter 2 of fiscal year 2013 and then leveled off or declined,
and 3-5 day performance declined throughout fiscal year 2014.
• National delivery performance for bulk First-Class Mail improved in fiscal year
2012, but generally declined throughout fiscal year 2014.
• Generally, delivery performance for Standard Mail improved with exceptions
in quarter 3 of fiscal year 2013 and quarter 2 of fiscal year 2014 when it
declined.
• National delivery performance for Periodicals has fluctuated in recent years,
with the most recent performance levels similar to those in fiscal year 2011
.
• See appendix II for more detailed information on national delivery performance.
Objective 3
Page 27
Enclosure 1
Page 32 GAO-14-828R Postal Delivery
Figure 8: Single-Piece First-Class Mail -
National Delivery Performance
• National performance for single-piece First-Class Mail was improving until
quarter 2 of fiscal year 2013 and then generally declined, and 3-5 day
performance declined in fiscal year 2014.
Objective 3
Page 28
Enclosure 1
Page 33 GAO-14-828R Postal Delivery
Figure 9: Bulk First-Class Mail - National
Delivery Performance
• National delivery performance for bulk First-Class Mail
improved in fiscal year 2012, but declined in fiscal year 2014.
Objective 3
Page 29
Enclosure 1
Page 34 GAO-14-828R Postal Delivery
Figure 10: Standard Mail - National
Delivery Performance
Objective 3
• Generally, performance for Standard Mail improved with exceptions in quarter 3
of fiscal year 2013 and quarter 2 of fiscal year 2014 when it declined.
0
10
20
30
40
50
60
70
80
90
100
2011 (Q4)
2012
2013
2014
Fiscal Year
Standard Mail Delivery Performance, Fiscal Years 2011 to 2014
Carrier Route
High Density & Saturation Letters
High Density & Saturation Flats/Parcels
Letters
Percent delivered
on time
Source: USPS. | GAO-14-828R
Note: Fiscal year 2014 data are for the first three quarters.
Note: Standard Mail consists of: 1) carrier route, which requires a mailer to sort mailpieces to the individual carrier routes within a 5-digit ZIP Code, 2) high density and saturation
letters, which must be prepared in carrier walk sequence, 3) high density and saturation flats/parcels, which must be prepared in carrier walk sequence, and 4) letters that are
included among the Standard Mail mailing requirement of 200 pieces. In addition, different volume and/or weight requirements apply to these types of Standard Mail.
Page 30
Enclosure 1
Page 35 GAO-14-828R Postal Delivery
Figure 11: Periodicals - National Delivery
Performance
Objective 3
• National delivery performance for Periodicals has fluctuated in
recent years, with the most recent performance levels similar to
those in fiscal year 2011.
0
10
20
30
40
50
60
70
80
90
100
2011
2012
2013
2014
Periodicals Delivery Performance,
Fiscal Years 2011 to 2014
Percent delivered
on time
Fiscal Year
Source: USPS. | GAO-14-828R
Note: Fiscal year 2014 data are for the first three quarters.
Page 31
Enclosure 1
Page 36 GAO-14-828R Postal Delivery
Table 4: USPS Mail Processing Plants in the
Dakotas and Chicago Districts, Fiscal Years 2011-
2014
Name
City
State
5-digit ZIP
Status
Year closed
or planned
3-digit ZIP
consolidated
Current 3-digit
Service area
Date origination
consolidation completed
Date destination
consolidation completed
Fargo P&DC/P&DF
Fargo
ND
58102
Open
580, 581, 584
Grand Forks CSMPC
Grand Forks
ND
58201
Open
582-583
Devils Lake CSMPC
Devils Lake
ND
58301
Closed
2012
583
None
7/1/2012
7/1/2012
Jamestown CSMPC
Jamestown
ND
58401
Closed
2011
584
None
12/1/2011
12/1/2011
Bismarck P&DC/P&DF
Bismarck
ND
58504
Open
576, 585-586
Minot CSMPC
Minot
ND
58701
Open
2015
587-588
Billings P&DC
Billings
MT
59101
Open
590-593, 597
Wolf Point CSMPC
Wolf Point
MT
59201
Closed
2013
592
None
4/20/2013
4/20/2013
Miles City CSMPC
Miles City
MT
59301
Closed
2011
593
None
9/30/2011
9/30/2011
Great Falls P&DF
Great Falls
MT
59404
Open
594-596
Havre CSMPC
Havre
MT
59501
Closed
2011
595
None
9/30/2011
9/30/2011
Helena CSMPC
Helena
MT
59601
Closed
2013
596
None
12/3/2011
5/4/2013
Butte CSMPC
Butte
MT
59701
Closed
2013
597
None
12/3/2011
6/17/2013
Missoula CSMPC
Missoula
MT
59801
Open
598-599
Kalispell CSMPC
Kalispell
MT
59901
Closed
2013
599
None
2/18/2013
2/18/2013
Sioux Falls P&DC
Sioux Falls
SD
57104
Open
500-513, 570, 571
Dakota Central P&DF
Huron
SD
57399
Open
2015
573-575
Aberdeen P&DF
Aberdeen
SD
57401
Closed
2013
574
None
2/23/2013
2/23/2013
Pierre CSMPC
Pierre
SD
57501
Closed
2013
575
None
2/23/2013
2/23/2013
Mobridge CSMPC
Mobridge
SD
57601
Closed
2011
576
None
12/1/2011
12/1/2011
Rapid City P&DF
Rapid City
SD
57701
Open
577
577
Cardiss Collins P&DC
Chicago
IL
60699
Open
606-608
606-608
5/16/2012
Irving Park Road
Chicago
IL
60701
Open
606-608
Source: USPS. | GAO-14-828R
Appendix I
Page 32
Enclosure 1
Page 37 GAO-14-828R Postal Delivery
Mixed Delivery Performance in Areas of the
Dakotas District Affected by Consolidations
• Delivery performance was mixed for specific areas in the
Dakotas District affected by processing facility consolidations.
• The next slide shows on-time delivery performance for single-
piece First-Class Mail in the two quarters before and after the
consolidations, for areas that had been served by the
processing facilities that were consolidated.
• For example, on-time performance improved 1-day, 2-day,
and 3-day single-piece First-Class Mail for the area served by
the Jamestown, ND facility after it was consolidated;
conversely, on-time performance declined for the areas
served by the Wolf Point, MT, Devil’s Lake, ND, and Kalispell,
MT facilities.
Appendix II
Page 33
Enclosure 1
Page 38 GAO-14-828R Postal Delivery
Figure 12: Effect of Consolidations on Delivery
Performance in Dakotas District, Fiscal Years 2011-
2013
Appendix II
Page 34
Enclosure 1
Page 39 GAO-14-828R Postal Delivery
Table 5: National Delivery Performance Data
Appendix II
National Data
Percent On Time
FY 2011
Q1
FY 2011
Q2
FY 2011
Q3
FY 2011
Q4
FY 2012
Q1
FY 2012
Q2
FY 2012
Q3
FY 2012
Q4
FY 2013
Q1
FY 2013
Q2
FY 2013
Q3
FY 2013
Q4
FY 2014
Q1
FY 2014
Q2
FY 2014
Q3
First-Class Mail
Single Piece Letter & Postcard
1-Day
96.5
96.6
97.0
96.9
96.6
97.2
97.3
97.0
96.4
96.8
97.1
97.0
96.3
96.3
97.2
2-Day
93.2
93.2
95.5
94.9
93.7
95.7
96.4
96.7
94.9
95.7
96.7
96.7
95.0
94.7
96.6
3-5 Day
90.0
90.5
94.1
93.4
89.8
93.2
95.2
94.3
90.1
91.7
93.7
94.1
86.1
85.1
91.0
Bulk (Presort) Letter & Postcard
1-Day
84.2
91.8
96.0
91.1
95.5
97.3
97.6
97.2
96.8
97.2
97.7
97.7
97.0
96.7
97.5
2-Day
88.9
84.8
91.2
92.2
92.9
96.0
97.2
97.5
96.3
97.1
97.7
97.8
96.2
95.4
97.2
3-5 Day
85.9
89.5
93.8
94.0
92.6
95.6
96.9
96.5
93.8
95.1
96.4
96.5
91.4
90.2
93.7
Flats
1-Day
90.2
90.1
91.0
89.8
88.4
90.0
90.9
89.8
86.9
86.7
86.6
86.1
83.6
83.8
85.7
2-Day
83.7
83.3
85.8
83.3
81.4
84.9
85.9
87.9
83.9
83.9
84.9
84.8
81.6
80.5
84.1
3-5 Day
78.2
78.8
82.5
80.8
74.9
79.5
83.5
81.7
76.2
76.9
78.4
78.7
69.5
69.4
74.9
Parcels
1-Day
89.0
89.8
92.2
90.3
86.0
89.7
92.4
92.2
87.8
88.2
89.9
90.4
86.9
86.7
90.1
2-Day
79.9
81.9
86.6
84.4
78.7
85.7
90.2
91.0
85.4
87.5
90.6
90.5
84.9
84.0
89.1
3-5 Day
83.4
85.8
89.2
88.0
82.4
88.7
91.7
90.5
84.6
87.3
90.3
91.2
80.4
80.9
87.1
Standard Mail
Carrier Route
N/A
N/A
N/A
46.2
47.7
78.3
88.2
79.0
69.8
82.4
85.9
84.0
73.8
80.7
87.6
High Density & Saturation Letters
N/A
N/A
N/A
82.7
74.4
88.5
94.6
93.0
86.5
91.3
92.7
92.8
91.2
90.1
93.3
High Density & Saturation Flats/Parcels
N/A
N/A
N/A
74.8
94.9
90.7
92.9
86.7
80.0
89.2
91.2
89.1
80.1
88.2
90.7
Flats
N/A
N/A
N/A
57.8
51.4
73.2
84.6
77.3
72.1
75.7
80.2
80.5
72.6
73.4
80.2
Letters
N/A
N/A
N/A
72.2
68.3
82.1
88.7
87.0
81.7
84.8
88.4
88.9
85.2
84.5
88.9
Mixed Product Letters
N/A
N/A
N/A
66.9
65.2
80.4
88.8
87.2
81.6
83.9
90.0
90.4
84.9
85.0
90.9
Mixed Product Flats
N/A
N/A
N/A
50.6
44.4
70.0
82.9
78.5
72.5
81.8
83.1
85.6
50.2
47.9
87.3
Periodicals
Outside County
N/A*
N/A*
N/A*
N/A*
45.9
65.8
82.1
82.6
79.4
83.2
82.7
83.1
77.7
79.2
83.4
Package Services
Single-Piece Parcel Post
77.7
83.1
85.2
81.7
79.3
87.5
91.2
89.7
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Bound Printed Matter Flats
N/A
N/A
N/A
42.1
40.0
60.7
49.2
67.2
57.2
56.8
63.0
72.1
68.9
55.8
59.1
Bound Printed Matter Parcels
N/A
N/A
N/A
83.2
89.0
95.2
97.3
96.0
N/A
N/A
N/A
N/A
N/A
N/A
99.6
Media Mail/Library Mail
84.7
86.8
92.1
87.3
87.1
92.7
95.9
94.4
N/A
N/A
N/A
N/A
N/A
N/A
94.7
Page 35
Enclosure 1
Page 40 GAO-14-828R Postal Delivery
Table 6: Dakotas District Delivery Performance Data
Appendix II
Source: USPS. | GAO-14-828R
Note: Results are not shown in this table for Within County Periodicals, Standard Mail Parcels, and Inbound Surface Parcel Post (at UPU rates) because no data
were available that measured the on-time performance of these types of mail.
Dakotas District
Percent On Time
FY 2011
Q1
FY 2011
Q2
FY 2011
Q3
FY 2011
Q4
FY 2012
Q1
FY 2012
Q2
FY 2012
Q3
FY 2012
Q4
FY 2013
Q1
FY 2013
Q2
FY 2013
Q3
FY 2013
Q4
FY 2014
Q1
FY 2014
Q2
FY 2014
Q3
First-Class Mail
Single Piece Letter & Postcard
1-Day
96.5
95.8
97.1
97.0
96.1
96.7
97.3
97.4
96.2
96.4
97.4
97.1
97.4
97.3
96.9
2-Day
92.5
92.2
95.1
94.5
93.6
95.1
96.0
97.1
95.4
95.5
96.0
94.8
93.3
96.3
95.5
3-5 Day
87.2
90.1
94.3
93.6
87.8
90.8
95.5
93.6
88.8
89.2
91.0
91.2
80.4
81.7
89.3
Bulk (Presort) Letter & Postcard
1-Day
N/A
97.2
97.8
99.1
99.1
99.3
99.3
99.4
99.2
99.4
99.4
99.0
98.8
99.2
99.2
2-Day
84.0
95.8
96.1
95.4
96.0
98.1
98.1
98.9
97.9
98.2
98.7
98.7
97.0
98.6
98.8
3-5 Day
78.7
89.4
94.3
95.0
91.6
95.6
96.6
96.8
93.4
92.7
94.0
93.8
87.3
89.3
92.3
Flats
1-Day
93.6
93.7
93.8
90.3
91.0
92.2
92.9
92.9
89.8
88.6
92.4
90.8
88.0
85.9
90.1
2-Day
84.7
82.7
85.7
86.7
88.8
90.0
85.1
88.9
93.9
88.5
86.9
85.9
77.0
81.9
87.9
3-5 Day
74.0
76.5
82.5
73.9
72.8
80.2
80.0
78.8
70.1
71.6
76.0
77.4
66.2
70.8
73.7
Parcels
1-Day
96.2
95.8
97.5
96.7
93.9
95.5
96.3
97.4
N/A
N/A
N/A
N/A
N/A
N/A
96.1
2-Day
84.0
86.1
88.7
89.4
81.3
88.2
92.3
96.5
N/A
N/A
N/A
N/A
N/A
N/A
94.6
3-5 Day
84.3
88.4
92.2
92.0
82.8
89.9
93.8
92.1
N/A
N/A
N/A
N/A
N/A
N/A
89.3
Standard Mail
Carrier Route
N/A
N/A
N/A
20.8
74.0
77.7
88.3
87.4
82.5
83.8
82.9
87.3
82.5
90.2
92.8
High Density & Saturation Letters
N/A
N/A
N/A
87.9
96.4
98.6
99.6
90.5
82.8
79.7
80.3
90.0
91.4
91.4
95.0
High Density & Saturation Flats/Parcels
N/A
N/A
N/A
N/A
N/A
N/A
86.6
87.2
84.7
80.2
85.7
89.9
84.7
93.0
94.6
Flats
N/A
N/A
N/A
73.2
51.9
81.2
91.5
86.3
84.1
82.5
79.2
80.5
77.7
79.8
87.2
Letters
N/A
N/A
N/A
85.3
80.6
91.3
94.9
92.4
87.9
87.0
86.3
90.4
89.1
90.0
93.3
Mixed Product Letters
N/A
N/A
N/A
59.8
73.5
86.5
94.5
92.2
88.5
80.2
87.0
93.5
91.9
94.3
96.2
Mixed Product Flats
N/A
N/A
N/A
50.9
59.9
78.8
92.0
88.7
90.1
88.8
77.8
88.1
49.5
50.3
64.8
Periodicals
Outside County
N/A
N/A
N/A
N/A
54.4
67.2
80.2
85.1
84.8
85.0
82.3
84.7
81.8
84.4
N/A
Package Services
Single-Piece Parcel Post
75.9
78.6
81.7
80.1
73.9
84.4
90.0
86.5
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Bound Printed Matter Flats
N/A
N/A
N/A
47.7
48.2
79.9
81.4
79.5
85.6
71.4
37.9
78.4
79.2
64.7
82.7
Bound Printed Matter Parcels
N/A
N/A
N/A
94.7
95.9
94.2
95.0
94.9
N/A
N/A
N/A
N/A
N/A
N/A
99.0
Media Mail/Library Mail
82.6
81.7
87.8
84.0
82.1
88.8
94.2
91.7
N/A
N/A
N/A
N/A
N/A
N/A
93.3
Page 36
Enclosure 1
Page 41 GAO-14-828R Postal Delivery
Figure 13: Dakotas District: Single-Piece
First
-Class Mail Delivery Performance
Appendix II
• District performance for single-piece First-Class Mail generally
improved until quarter 2 of fiscal year 2013, followed by
declines through quarter 3 of fiscal year 2014.
Page 37
Enclosure 1
Page 42 GAO-14-828R Postal Delivery
Figure 14: Dakotas District: Bulk First-
Class Mail Delivery Performance
Appendix II
Source: USPS.
• District performance for bulk First-Class Mail improved through
quarter 1 of fiscal year 2013, with declines for 3-5 day mail starting
in quarter 2 of fiscal year 2013.
Page 38
Enclosure 1
Page 43 GAO-14-828R Postal Delivery
Table 7: Chicago District Delivery Performance Data
Appendix II
Source: USPS. | GAO-14-828R
Note: Results are not shown in this table for Within County Periodicals, Standard Mail Parcels, and Inbound Surface Parcel Post (at UPU rates) because no data were
available that measured the on-time performance of these types of mail. .
Chicago District
Percent On Time
FY 2011
Q1
FY 2011
Q2
FY 2011
Q3
FY 2011
Q4
FY 2012
Q1
FY 2012
Q2
FY 2012
Q3
FY 2012
Q4
FY 2013
Q1
FY 2013
Q2
FY 2013
Q3
FY 2013
Q4
FY 2014
Q1
FY 2014
Q2
FY 2014
Q3
First-Class Mail
Single Piece Letter & Postcard
1-Day
95.7
94.7
96.0
95.6
95.6
95.4
95.9
95.5
93.6
95.7
96.6
96.4
95.2
91.7
95.5
2-Day
94.6
91.8
95.8
95.5
93.4
95.6
97.2
97.6
97.0
96.8
97.7
98.0
95.7
94.3
97.5
3-5 Day
85.2
82.4
92.6
91.3
85.3
91.1
93.5
94.3
90.4
91.4
94.0
94.0
85.1
77.4
90.3
Bulk (Presort) Letter & Postcard
1-Day
N/A
93.3
96.1
96.3
96.5
96.7
96.0
84.0
96.4
97.8
96.6
95.7
87.0
94.3
97.1
2-Day
75.9
72.1
94.5
86.1
91.8
94.9
96.7
97.8
95.7
96.7
96.8
96.7
93.8
92.4
96.9
3-5 Day
82.5
81.2
94.2
93.2
90.7
94.6
95.4
96.3
94.9
94.5
96.2
93.8
87.7
81.4
91.8
Flats
1-Day
90.2
86.4
88.5
83.9
81.3
85.0
84.0
82.0
82.1
74.0
81.8
81.3
78.8
76.9
79.2
2-Day
80.7
80.4
83.6
79.6
83.1
83.1
87.5
89.2
87.5
80.4
87.2
90.2
90.4
81.3
86.8
3-5 Day
74.5
66.6
83.7
74.9
78.8
79.6
83.4
84.9
77.3
77.7
76.7
75.8
71.4
60.7
77.1
Parcels
1-Day
70.3
75.5
85.4
82.9
80.1
77.0
76.2
71.5
N/A
N/A
N/A
N/A
N/A
N/A
42.0
2-Day
78.3
78.5
88.2
86.5
84.1
89.6
90.7
91.0
N/A
N/A
N/A
N/A
N/A
N/A
77.0
3-5 Day
79.9
80.3
87.5
85.9
80.8
87.1
89.9
86.3
N/A
N/A
N/A
N/A
N/A
N/A
67.9
Standard Mail
Carrier Route
N/A
N/A
N/A
37.3
41.4
71.0
87.8
85.0
79.0
89.9
89.0
86.8
64.0
60.0
81.2
High Density & Saturation Letters
N/A
N/A
N/A
75.4
30.6
82.8
97.6
97.1
91.1
98.0
92.0
90.2
92.9
91.4
86.7
High Density & Saturation Flats/Parcels
N/A
N/A
N/A
96.1
96.4
91.6
91.5
66.0
62.9
91.3
77.0
75.6
44.9
77.8
80.2
Flats
N/A
N/A
N/A
39.7
29.5
59.8
84.8
74.5
72.0
73.1
72.3
77.3
52.4
47.2
62.9
Letters
N/A
N/A
N/A
53.5
42.6
74.4
89.1
90.3
84.2
90.1
90.2
88.3
89.3
82.2
88.8
Mixed Product Letters
N/A
N/A
N/A
52.2
45.7
71.7
88.9
89.8
83.6
89.6
91.9
86.7
93.3
90.3
93.4
Mixed Product Flats
N/A
N/A
N/A
42.3
32.4
64.9
84.8
80.9
74.6
80.4
79.8
87.4
19.9
22.3
39.5
Periodicals
Outside County
N/A
N/A
N/A
N/A
45.2
73.1
88.5
89.4
88.1
90.8
89.7
89.2
77.2
66.2
N/A
Package Services
Single-Piece Parcel Post
72.1
76.7
87.1
85.1
83.5
90.6
93.6
91.4
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Bound Printed Matter Flats
N/A
N/A
N/A
27.3
10.5
19.4
47.3
69.0
24.1
32.8
43.9
40.1
43.2
44.9
72.5
Bound Printed Matter Parcels
N/A
N/A
N/A
89.0
94.3
96.7
98.5
97.0
N/A
N/A
N/A
N/A
N/A
N/A
94.6
Media Mail/Library Mail
80.2
80.9
93.0
90.7
91.9
94.6
97.0
95.9
N/A
N/A
N/A
N/A
N/A
N/A
93.2
Page 39
Enclosure 1
Page 44 GAO-14-828R Postal Delivery
Figure 15: Chicago District: Single-Piece
First
-Class Mail Delivery Performance
Appendix II
• District performance generally improved through quarter 1 of fiscal
year 2013, marginally improved through quarter 4 of fiscal
year
2013, and 3-5 day mail declined in quarter 1 and quarter 2 of
fiscal year 2014.
Page 40
Enclosure 1
Page 45 GAO-14-828R Postal Delivery
Figure 16: Chicago District: Bulk First-
Class Mail Delivery Performance
Appendix II
• District delivery performance trends varied for bulk First-Class
Mail, particularly for 1-day mail, and with declines for 2-day and
3-5 day mail starting in quarter 4 of fiscal year 2013.
Page 41
Enclosure 2
Page 46 GAO-14-828R Postal Delivery
Enclosure 2: Objectives, Scope, and Methodology
Our objectives were to describe (1) changes to delivery standards starting in 2012 and how they
affected the number of days it takes for mail to be delivered (i.e., delivery time); (2) operational
changes the U.S. Postal Service (USPS) has made starting in 2012 and how these may have
affected delivery time; and (3) trends in delivery performance starting in fiscal year 2011.
To conduct this performance audit, we reviewed USPS regulations that define its delivery
standards and operational changes. We also reviewed relevant reports from USPS and the
Postal Regulatory Commission (PRC) as well as USPS’s Federal Register notices and written
responses from USPS about its operational changes and changes to delivery standards for
major types of market-dominant mail.
9
We used mail delivery performance and mail volume
data provided by USPS to analyze performance trends. We compared the data before and after
delivery standard changes, from fiscal years 2011 to the second quarter of fiscal year 2014, at
the national level, and for one rural (“Dakotas”) and one urban (“Chicago”) postal district;
“Dakotas” was chosen primarily due to its relatively large size and rural nature, while “Chicago”
was chosen primarily for its relatively small size, and urban nature. We selected the Dakotas
and Chicago districts on a judgmental basis, and therefore, the results cannot be generalized
across all postal districts.
With respect to reviewing the impact that changes to delivery standards had on mail volumes,
USPS estimated the percent of First-Class Mail volume that had delivery standards upgraded
(i.e., standards changed with fewer days to deliver the mail) or downgraded (i.e., standards
changed with more days to deliver the mail). To develop its estimates, USPS compared First-
Class Mail delivery standards from the third quarter of fiscal year 2012 to the third quarter of
fiscal year 2014 to determine which 3-digit ZIP Code pairs were upgraded or downgraded.
USPS then estimated mail volumes which were sent between ZIP Code pairs that were
upgraded or downgraded, using data collected by the Origin Destination Information System-
Revenue, Pieces, and Weight (ODIS-RPW) in the second quarter of fiscal year 2014. The
ODIS-RPW statistical sampling system is a national probability sampling system of mail
destinating or exiting from USPS stations, branches, associate offices and mail processing
plants used for estimating mail revenue and volume by product, and for other purposes. In the
process of collecting these data, the ODIS-RPW data collectors record the origin ZIP Code on
the mail piece. The origin ZIP Code is present on all single-piece First-Class Mail allowing the
measurement of volume between 3-digit ZIP Code pairs between origin cancellation and
destination locations and thus volume by delivery standard. However, the ODIS-RPW sample
design is not designed to collect information for every 3-digit ZIP Code pair. Sampled mail that
only had information for the 3-digit ZIP Code where the mail destinated (and not where it
originated) was excluded from the analysis of the impact of changes in delivery standards on
mail volume. For this reason, 35 percent of First-Class Mail pieces sampled by ODIS were
excluded from the analysis, including 9 percent of single-piece First-Class Mail and 50 percent
of bulk First-Class Mail that consisted of mail with a Permit imprint that had no origin ZIP Code
9
The major types of market-dominant mail include First-Class Mail, Standard Mail, Periodicals (mainly magazines and
local newspapers), and Package Services (primarily Alaska Bypass Mail, Media/Library Mail, and Bound Printed
Matter). Carrier Route Standard Mail is organized according to letter carrier routes. Standard Mail that qualified for
saturation and high density rates consists of mailings that are to exceed minimum percentages or numbers of
addresses on a mail delivery route.
Enclosure 2
Page 47 GAO-14-828R Postal Delivery
on the mail piece.
10
We assessed the reliability of the ODIS data through a review of related
documents, such as written responses from USPS. We found the ODIS data on volume
sufficiently reliable as the data source for providing a general description on the impact changes
to delivery standards had on First-Class Mail volumes.
With respect to reviewing the volumes of market-dominant mail subject to different delivery
standards (e.g., 1-day standard, 2-day standard, etc.), USPS provided data on volumes for
single-piece First-Class Mail and bulk (presort) First-Class Mail subject to different delivery
standards for each quarter from fiscal year 2011 to the second quarter of fiscal year 2014.
These data included:
• External First-Class Mail Measurement System (EXFC) data: EXFC is a system in which
a USPS contractor creates test mail pieces to measure on-time delivery performance in
892 3-digit ZIP Code areas among which virtually all single-piece First-Class Mail
originates and destinates. We assessed the reliability of the EXFC data through a
review of related documents, such as written responses from USPS. We found the
EXFC data on volume sufficiently reliable as the data source for providing a general
description of single-piece First-Class Mail volumes with different delivery standards.
According to USPS, the volume data provided for single-piece First-Class Mail letters
and postcards “simply represents the volume of mail measured by service standard.
Because the statistical design for the EXFC study is destination based to manage the
statistical precision of district level scores, the volume of mail measured to each district
is similar. Thus the measured volume information should not be used for inferences
about real mail volumes.” USPS further explained that “the EXFC system design
dictates the planned minimum number of pieces by service standard going to each
district each quarter to meet desired statistical precision targets for each reported
service standard group and to achieve other coverage criteria. The service standard is
determined by comparing the entry location 3-digit [ZIP Code] (where mail is entered)
and 3-digit of destination/routing ZIP Code of the mail piece to the USPS service
standards directory.” Although USPS could have used a national sampling system to
provide more representative data on the impact that changes to delivery standards had
on single-piece First-Class Mail volumes, it did not do so because this would have
required special computer programming, unlike EXFC. USPS explained that the sample
design for ODIS-RPW is not set up to obtain information from all origin-destination ZIP
Code pairs and in their right proportion to delivery standard groupings.
• Intelligent Mail Accuracy and Performance System (iMAPS) data: This internal
measurement system measures on-time delivery performance for bulk (presort) First-
Class Mail pieces that have Full Service Intelligent Mail Barcodes and that meet other
data rules. We assessed the reliability of the iMAPS data through a review of related
documents, such as written responses from USPS. We found the iMAPS data on
volume sufficiently reliable as the data source for providing a general description of bulk
(presort) First-Class Mail (FCM) volumes with different delivery standards. However,
according to USPS, the volume of these barcoded pieces with 1-day, 2-day, and 3-to-5
day standards should not be considered to be in proportion to total volumes of bulk First-
Class Mail. USPS explained that “Mail volume information provided for Presort First-
Class Mail letters and cards represents the measured volume for each quarter. Mailer
10
A Permit imprint displays an authorization to mail by using indicia or an imprint in place of stamps or meter
impressions. Mail with a Permit imprint does not have an origin ZIP Code on the mail piece.
Enclosure 2
Page 48 GAO-14-828R Postal Delivery
adoption of Full-Service Intelligent Mail has not necessarily been random or
geographically representative of the origin points of mail. Thus, the volume information
should not be considered to be in proportion to total presort mail volumes. The lack of
participating mailers in locations is most impactful on the overnight volumes, particularly
in the early quarters of the data provided.” USPS noted that iMAPS was not designed to
include all bulk (presort) First-Class Mail letters and cards in measurement. USPS said,
“Instead, the system uses only the Full Service Intelligent Mail pieces to represent
service performance for all Presort FCM. Data exclusion rules remove pieces that do not
have the basic elements required for accurate measurement (start-the-clock date/time
and location and stop-the-clock date/time and location) or which have inconsistencies in
the data indicating that accurate measurement is not possible.” In the second quarter of
fiscal year 2014, 55 percent of Full Service and 43 percent of Commercial Mail was “in
measurement.” These exclusions could further affect the representativeness of the
measured mail.
In addition, USPS projected the percent of all First-Class Mail volume that would be subject to
different delivery standards after implementation of Phase 2 of its plan to consolidate its mail
processing operations and network, which is scheduled to begin January 5, 2015, and posted
these projections on its Web site.
11
In explaining how its projections were compiled, USPS told
us that: “The expectation of 20% of First-Class Mail delivered overnight under Phase 2
represents a high level analysis of potential First Class overnight in the future network. Mailer
behavior based on the future network is currently unknown, and reasonable assumptions were
made to estimate the impact. This analysis looked at First-Class Mail volume from ODIS broken
down to 3-digit [ZIP Code] pairs, expected service standards at the completion of planned
consolidations, planned processing windows (incoming primary [sortation of mail] starting at
0800, [Delivery Point Sequencing] DPS between 1200 and 0600, etc.),
12
processing capacity
(expected number of machines and expected throughput) and expected mail arrival profile to
determine how much mail could potentially receive overnight service based on the future
network.” Thus, USPS projections for First-Class Mail volumes subject to different delivery
standards after Phase 2 were based on different sources and methods than USPS data for
single-piece and bulk First-Class Mail volumes subject to different delivery standards for each
quarter from fiscal year 2011 to the second quarter of fiscal year 2014.
To further illustrate how changes to delivery standards affected the number of days it takes for
mail to be delivered, we included maps that illustrate examples of delivery standards for First-
Class Mail that were in effect before and after USPS changed its delivery standards on July 1,
2012. These maps show standards in effect as of the first quarter of fiscal year 2008, and the
third quarter of fiscal year 2014. The maps for the third quarter of fiscal year 2014 were
generated using USPS software accessible on its Web site. The maps for 2008 were generated
using USPS data and software that GAO obtained in conjunction with a previous review. We
requested mapping software to produce comparable maps for delivery standards in effect as of
third quarter fiscal year 2012, which was the most recent quarter before the July 2012 change in
delivery standards. USPS said the requested data were not available because the source data
are updated each quarter and maps from previous quarters are not archived. Since the maps
11
See USPS answers to frequently asked questions about Phase 2, available as of Sept. 2, 2014, at
http://about.usps.com/news/electronic-press-kits/our-future-network/ofn-phase-2-faqs.htm.
12
Incoming primary sortation of mail is a mail processing operation that sorts mail destinating in the area served by
the processing plant for dispatch to local post offices and retail facilities, where carriers typically pick up their mail.
Delivery Point Sequencing sorts mail into the order it is to be delivered on a carrier route.
Enclosure 2
Page 49 GAO-14-828R Postal Delivery
do not consist of underlying data and provide only a visual representation of delivery
standards—which enabled us to provide a visual illustration for how changes in delivery
standards affected delivery—we did not assess the reliability of this information.
To analyze trends in delivery performance starting in fiscal year 2011, we analyzed delivery
performance data for each type of mail based on comparing how long it takes for the mail to be
delivered with the applicable standard; mail delivered within the delivery standard is considered
to be on time. These are the only available delivery performance data for these types of mail.
We assessed the reliability of the data through a review of related documents, such as written
responses from USPS. We found these data sufficiently reliable for illustrating general trends in
mail delivery performance before and after USPS changed mail delivery standards.
• To analyze the impact changes in delivery standards had on the on-time delivery of
single-piece First-Class Mail, we used EXFC data. As noted above, EXFC is a system
in which a USPS contractor creates test mail pieces to measure delivery performance in
892 3-digit ZIP Code areas among which virtually all single-piece First-Class Mail
originates and destinates. Senders record the time they place test pieces in a collection
box or lobby chute. Those test mail pieces are sent to a nationwide panel of receivers
who record the date when the mail piece was delivered. Actual transit time is then
compared against First-Class Mail delivery standards. The 2006 Postal Accountability
and Enhancement Act required USPS to, among other things, use an external system to
measure delivery performance of market-dominant products, but also authorized the
PRC to approve a qualified internal system as a replacement for an external system.
13
EXFC is an external measurement system that USPS has used to fulfill this requirement.
• To analyze the impact changes in delivery standards had on the on-time delivery of bulk
(presort) First-Class Mail, Periodicals, Standard Mail (letters and flats), and Bound
Printed Matter flats (a type of market-dominant Package Services), we used
measurement data USPS generated from iMAPS.
• To analyze the impact changes in delivery standards had on the on-time delivery of
various types of market-dominant Package Services (i.e., single-piece Parcel Post,
Bound Printed Matter Parcels, and Media Mail/Library Mail), we used measurement data
USPS generated from its Product Tracking System, which was replaced with the Product
Tracking and Reporting System effective April 21, 2013. This internal measurement
system measured delivery performance using barcode scans, including Delivery
Confirmation scans. We assessed the reliability of these data through a review of written
responses from USPS. We found this data sufficiently reliable for providing a general
description on mail delivery performance for various types of market-dominant Package
Services before and after USPS changed mail delivery standards.
• The data on on-time delivery performance for bulk First-Class Mail, Standard Mail,
Periodicals, and market-dominant Package Services included in this report are limited to
mail pieces tracked with barcodes that meet certain USPS business rules. These on-
time performance data are not from a random sample and therefore may not be
representative of all mail. These data also are not complete for all periods from the first
quarter of fiscal year 2011 through the third quarter of fiscal year 2014. In some cases,
measurement did not occur at all for a type of mail in a given period or was insufficient to
13
Pub. L. 109-435, § 301, 120 Stat. 3218 (Dec. 20, 2006), codified at 39 U.S.C. § 3691.
Enclosure 2
Page 50 GAO-14-828R Postal Delivery
report results.
14
• The data on on-time delivery performance included in this report are limited to market-
dominant products. According to USPS officials, USPS considers delivery performance
data for competitive products (e.g., Priority Mail) to be commercially sensitive and
therefore the data are not made publically available. Additionally, USPS considers
delivery performance data as commercially-sensitive and non-public for Single Piece
Parcel Post (now identified as Standard Post) after its transfer from the market-dominant
product list to competitive product list on January 27, 2013.
In other cases, measurement did not occur for a given district because
there was no measured volume originating from or destinating from that district during
the period, even though volume was measured in other locations.
• National on-time delivery performance data presented in this report are based on results
for mail sent within the United States. Delivery performance data for each postal district
included in this report are composite performance data that include performance of mail
originating and/or destinating in a given postal district.
We conducted this performance audit from April 2014 to September 2014 in accordance with
generally accepted government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives.
14
For example, Standard Mail results were not available in the first two quarters of fiscal year 2011 because too few
mailers were certified to provide reliable measurement results. In the third quarter of fiscal year 2011, some Standard
Mail was measured but scores were not calculated for specific types of Standard Mail. Starting in the third quarter of
fiscal year 2013, no Standard Mail parcels were measured—in prior quarters only proxy data were reported; such
data are not included in this report. Similarly, only proxy data were reported for Within County Periodicals and
Inbound Surface Parcel Post at Universal Postal Union (UPU) rates; these data also are not included in this report. In
addition, results on First-Class Mail parcels were based solely on single-piece retail parcels because no data were
available for commercial First-Class Mail Parcels.
Enclosure 3
Page 51 GAO-14-828R Postal Delivery
Comments from the United States Postal Service
Enclosure 3
Page 52 GAO-14-828R Postal Delivery
(544207)
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