Discovering Savings

One mission of the Office of Inspector General is to help control postal costs. Through nationwide audits of postal operations, facilities, and transportation networks, the OIG has identified cost savings in everything from delivery operations to letter mail processing.

For example, from 2004 through 2006, in response to a request from the Postal Service’s Vice President of Network Operations Management, the OIG audited transportation routes to and from bulk mail centers (BMCs). Bulk mail includes magazines, advertising, and merchandise shipped by major mailers and is processed in 21 BMCs and other facilities nationwide. Less time-sensitive than other mail, bulk mail travels by highway and railroad, versus by air, which is more costly. The Postal Service spends more than $500 million annually on contracts to transport bulk mail.

In a series of 13 audits, the OIG identified potential savings of about $40.6 million by eliminating or reducing bulk mail transportation contracts across the country. In one such audit, the OIG analyzed all 1,224 trips that delivered mail to BMCs in the Postal Service’s Great Lakes Area from March through September 2004. OIG staff evaluated mail volume and the type of mail carried, interviewed postal employees, reviewed postal policies and procedures, visited BMCs and other postal facilities, and observed and photographed operations. Working with financial and computer analysts and other experts, the OIG identified 96 trips that could be modified or eliminated without affecting service by consolidating mail on other trips — potentially saving the Postal Service $7.7 million over the life of the existing contracts.