U.S. Postal Service: Delivery Performance Standards, Measurement,
and Reporting Need Improvement (27-JUL-06, GAO-06-733).
U.S. Postal Service (USPS) delivery performance standards and
results, which are central to its mission of providing universal
postal service, have been a long-standing concern for mailers and
Congress. Standards are essential to set realistic expectations
for delivery performance and organize activities accordingly.
Timely and reliable reporting of results is essential for
management, over-sight, and accountability purposes. GAO was
asked to assess (1) USPS's delivery performance standards for
timely mail delivery, (2) delivery performance information that
USPS collects and reports on timely mail delivery, and (3)
progress made to improve delivery performance information.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-733
ACCNO: A57548
TITLE: U.S. Postal Service: Delivery Performance Standards,
Measurement, and Reporting Need Improvement
DATE: 07/27/2006
SUBJECT: Performance management
Performance measures
Policy evaluation
Postal service
Reporting requirements
Standards
Strategic planning
Mail processing operations
Transparency
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GAO-06-733
* Results in Brief
* Background
* Some USPS Delivery Standards Are Not Useful and Transparent
* Some USPS Delivery Standards Have Limited Usefulness
* Delivery Standards for Standard Mail
* Delivery Standards for Package Services
* Delivery Standards for Periodicals
* Delivery Standards for Priority Mail
* Delivery Standards for First-Class Mail
* Delivery Standards for Express Mail
* Proposed Postal Reform Legislation and Delivery Standards
* USPS Delivery Standards Lack Adequate Transparency
* USPS Measurement and Reporting Of Delivery Performance Infor
* USPS Delivery Performance Measurement Is Not Complete
* USPS Reporting of Delivery Performance Lacks Adequate Transp
* USPS's Delivery Performance Reporting Is Not Adequate to Mee
* Delivery Performance Information Has Recently Improved but R
* Progress In Developing Complete Delivery Performance Measure
* Key Recommendations from Collaboration Efforts Involving USP
* Impediments Remain to Implementing Performance Measurement f
* Lack of Management Commitment and Effective Collaboration
* Other Impediments for Measuring Delivery Performance
* USPS Plans to Improve Service Performance, But Not to Implem
* Conclusions
* Recommendations for Executive Action
* Agency Comments and Our Evaluation
* Appendix I: Objectives, Scope, and Methodology
* Appendix II: USPS Delivery Standards
* Appendix III: Comments from the U.S. Postal Service
* Appendix IV: GAO Contact and Staff Acknowledgments
* GAO Contact
* Staff Acknowledgments
* Order by Mail or Phone
Report to Congressional Requesters
United States Government Accountability Office
GAO
July 2006
U.S. POSTAL SERVICE
Delivery Performance Standards, Measurement, and Reporting Need
Improvement
GAO-06-733
Contents
Letter 1
Results in Brief 3
Background 7
Some USPS Delivery Standards Are Not Useful and Transparent and Do Not
Reflect Current Mail Operations 10
USPS Measurement and Reporting Of Delivery Performance Information Is
Inadequate 22
Progress In Developing Complete Delivery Performance Measurement Is
Unsatisfactory Due To Lack of Management Commitment and Effective
Collaboration 31
Conclusions 41
Recommendations for Executive Action 42
Agency Comments and Our Evaluation 42
Appendix I Objectives, Scope, and Methodology 51
Appendix II USPS Delivery Standards 58
Appendix III Comments from the U.S. Postal Service 64
Appendix IV GAO Contact and Staff Acknowledgments 119
Tables
Table 1: Summary of USPS Delivery Standards for Timely Delivery of Mail 11
Table 2: USPS Measurement and Reporting of Timely Delivery Performance 23
Table 3: USPS Delivery Performance Measurement by Type of Mail 25
Table 4: USPS Delivery Performance Reporting by Type of Mail 28
Table 5: Timeline of Actions and Recommendations Related to Delivery
Performance Measurement 32
Table 6: Basis for GAO Assessment of USPS Delivery Standards, Measurement,
and Reporting 52
Table 7: USPS Delivery Standards by Class and Type of Mail 58
Table 8: USPS's Approximate Overview of the Service Standard Ranges for
Standard Mail and Periodicals (not specifically required) 63
Figure
Figure 1: Geographic Coverage of Delivery Performance Measurement for
First-Class Mail Deposited in Collection Boxes as Measured by EXFC 24
Abbreviations
APQC American Productivity and Quality Center BMC Bulk Mail Center DBMC
Destination Bulk Mail Center DDU Destination Delivery Unit DSCF
Destination Sectional Center Facility EMS Express Mail Service EXFC
External First-Class Measurement System GPRA Government Performance and
Results Act of 1993 MTAC Mailers' Technical Advisory Committee OCA Office
of the Consumer Advocate P&DC Processing and Distribution Center PETE
Priority End-to-End POM Postal Operations Manual PRC Postal Rate
Commission PSA Parcel Shippers Association PTS Product Tracking System SCF
Sectional Center Facility USPS U.S. Postal Service
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separately.
United States Government Accountability Office
Washington, DC 20548
July 27, 2006
The Honorable Susan M. Collins Chairman Committee on Homeland Security and
Governmental Affairs United States Senate
The Honorable Tom Carper United States Senate
The U.S. Postal Service's (USPS) mail delivery standards and performance,
which are central to its mission of providing postal services to all
communities, have been long-standing concerns for mailers and customers
who receive mail. Delivery performance standards (delivery standards) for
on-time delivery of mail enable USPS, mailers, and customers to set
realistic expectations for delivery performance, such as the number of
days mail takes to be delivered, and to organize their activities
accordingly. USPS and others rely on information about delivery
performance results to understand whether delivery standards are being met
and what is driving performance-that is, identifying which factors are
contributing to both successful and problem areas. This information is
vital for management, oversight, and accountability purposes. Mailers'
concerns revolve around whether standards, measurement, and reporting are
complete, transparent, and useful. These concerns include whether USPS's
delivery standards reflect its operations and whether they can be used as
a benchmark for measuring performance for all major types of mail;1
whether delivery performance measurement is adequate for USPS to set
goals, manage its operations, and improve its delivery performance; and
whether the reporting of delivery performance is adequate for various
stakeholders, such as mailers who need this information for business
planning, as well as USPS's Board of Governors and the Congress, who need
this information to fulfill their respective oversight and accountability
responsibilities. Delivery performance information also helps the
independent Postal Rate Commission (PRC) review proposed rates and render
advisory opinions on USPS proposals that USPS expects to affect the
quality of postal services nationwide or on a substantially nationwide
basis.
1For the purposes of this report, major types of mail include: Express
Mail (also referred to as Expedited Mail); Priority Mail (i.e.,
First-Class Mail that weighs over 13 ounces); First-Class
Mail-single-piece mail (e.g., bill payments and letters sent at the rate
of 39 cents for the first ounce plus 24 cents for each additional ounce)
and bulk mail (e.g., bills and advertising); Periodicals (mainly magazines
and local newspapers); Standard Mail (mainly bulk advertising and direct
mail solicitations); Package Services (e.g., parcels, merchandise,
catalogs, media mail, library mail, and books); and International Mail
(e.g., letters, parcels, and periodicals destinating in foreign
countries).
There is little statutory guidance on how USPS establishes delivery
standards. However, USPS is subject to statutory requirements related to
performance measurement and reporting. Since 1976, Title 39 of the U.S.
Code has required USPS to submit an annual Comprehensive Statement to its
congressional oversight and appropriations committees that must include
"data on the speed and reliability of service provided for the various
classes of mail and types of mail service," among other things. In
addition, the Government Performance and Results Act of 1993 (GPRA)
requires USPS to annually report to Congress and the public on its goals
and actual performance relative to these goals. Sponsors of postal reform
legislation have recognized concerns in the area of delivery standards,
measurement, and reporting; and the House and Senate have passed postal
reform legislation that would clarify USPS's delivery standards and create
a strong postal regulator who would administer statutory obligations for
USPS to annually report, for most types of mail, the level of service
provided "in terms of speed of delivery and reliability."2 The regulator
would be required to annually determine compliance with this reporting
requirement and would have the authority to obtain court orders to enforce
compliance as well as to impose fines in cases of deliberate
noncompliance.
This report assesses
1. delivery standards for the timely delivery of mail that USPS
has established,
2. delivery performance information on timely delivery of mail
that USPS measures and reports, and
3. progress USPS has made in improving its delivery performance
information.
2H.R. 22, 109th Congress, was passed by the House on July 26, 2005. The
Senate bill was introduced as S. 662, 109th Congress and on Feb. 9, 2006,
the Senate incorporated S. 662 into H.R. 22 and passed H.R. 22 in lieu of
S. 662.
To address these objectives, we based our assessment on applicable
laws-such as laws related to USPS's mission to provide prompt, reliable,
and effective universal postal service, including the prompt and
expeditious delivery of mail, and statutory reporting requirements related
to USPS's delivery performance. We also developed criteria based on
practices used by high-performing organizations, including practices for
performance management identified by the American Productivity and Quality
Center (APQC), a nonprofit organization that studies the best practices of
top-performing organizations and benchmarks business performance to help
organizations improve their quality and productivity. In addition, we
based our criteria for practices used by high-performing organizations on
our past work on USPS and other leading organizations.
Our criteria focused on the completeness, transparency, and usefulness of
the delivery standards, measures, and results for various types of mail.
We obtained information primarily from USPS documentation, including its
current delivery standards and other material provided in response to our
requests, publicly available USPS reports, documents filed in PRC
proceedings, and other USPS material available on its Web site. We also
obtained documentation from other sources, such as reports on joint
USPS-mailer committees, articles, and material provided to us by mailers.
We interviewed USPS officials responsible for USPS delivery performance
information and postal stakeholders, including representatives of mailer
groups, individual mailers, PRC, and PRC's Office of the Consumer
Advocate, which is charged with representing the interests of the general
public. We conducted a data reliability assessment of USPS delivery
performance information that was sufficient for the purposes of our
review. More details about our objectives, scope, and methodology are
included in appendix I. Our work was conducted from August 2005 to July
2006 in accordance with generally accepted government auditing standards.
Results in Brief
While USPS has developed delivery standards for its major types of mail,
the standards for several types of mail have not been updated in a number
of years to reflect significant changes in the way that mail is prepared
and delivered. As a result, these outdated standards are unsuitable as
benchmarks for setting realistic expectations for timely mail delivery,
measuring delivery performance, or improving service, oversight, and
accountability. For example, the delivery standards for Standard Mail,
USPS's largest volume mail category (48 percent of mail volume), were
established in the 1970s and are generally based on distance. These
standards do not take into account mailer activities, such as presorting
mail to the ZIP Code or carrier delivery route level, and entering mail at
a postal facility that generally is closer to the destination, that have
led to changes in USPS's mail processing and transportation networks. Such
activities became much more prevalent after USPS began providing discounts
to mailers for these activities more than 25 years ago. For example, the
degree of presorting alters the amount of handling the mail receives by
USPS and potentially speeds or slows delivery. For similar reasons,
delivery standards for some Periodicals and most Package Services mail are
outdated and do not reflect changes in the way mailers and USPS process
this mail. USPS officials told us that because of the variety of ways
these types of mail are sorted and enter the postal system, developing
standards to reflect expected speed of delivery is challenging.
Nevertheless, USPS has received several recommendations over the past
decade from committees including USPS and mailers representatives to
update its delivery standards to reflect these trends, but has not
implemented them. Sponsors of postal reform legislation have recognized
the need for action in this area, and Senate and House reform bills passed
in this session of Congress would require USPS to, respectively, modernize
its service standards and report its standards annually. To its credit,
USPS has modernized its standards for some types of mail, such as Parcel
Select. With regard to First-Class Mail (46 percent of mail volume), USPS
has occasionally updated its standards to reflect changes in operations
and performance, but PRC criticized changes that downgraded some of these
standards. In addition, USPS's existing delivery standards for some major
types of mail are not easily accessible, which impedes mailers from
obtaining such information to make informed decisions about different
mailing options with varying rates and service.
USPS does not measure and report its delivery performance for most types
of mail-less than one-fifth of total mail volume is measured-therefore,
transparency with regard to its overall performance in timely mail
delivery is limited. No representative measures of delivery
performance-measures that can be generalized to an entire class or major
type of mail-exist for Standard Mail (48 percent of volume), bulk
First-Class Mail (25 percent of volume), Periodicals (4 percent of
volume), and most Package Services (less than 1 percent of volume).
Similarly, USPS has only reported its delivery performance for a small
portion of its mail volume, concentrating primarily on the single-piece
First-Class Mail that is measured. Further, single-piece First-Class Mail
volume has been declining over the past 15 years and is expected to
continue declining. Since 1976, USPS has been required to provide "data on
the speed and reliability of service provided for the various classes of
mail and types of mail service" in its annual Comprehensive Statement
that is submitted to USPS's oversight and appropriations committees.3
However, USPS has focused again only on single-piece First-Class Mail in
reporting delivery performance in the Comprehensive Statement. Such
limited measurement also appears to fall short of proposed requirements in
the House- and Senate-passed bills for USPS to report annually on the
level of service provided for most types of mail "in terms of speed of
delivery and reliability." In April 2006, USPS improved its reporting on
its Web site by posting delivery performance information on a newly
created page, including selected results for the past quarter for the
timely delivery of some Express Mail, Priority Mail, First-Class Mail, and
Package Services. The information was provided as a result of an agreement
with PRC's Office of the Consumer Advocate.4 Nevertheless, USPS's
measurement and reporting gaps are an impediment to diagnosing delivery
problems and assessing the extent to which USPS is meeting its statutory
requirements to provide prompt and reliable service to patrons in all
areas of the United States.
USPS's rate of progress in developing a set of delivery performance
measures for all major types of mail has been slow and inadequate, as has
its progress in reporting its performance for these types of mail. In
recent years, USPS has implemented additional delivery performance
measures for some low-volume types of mail that collectively comprise less
than 1 percent of total mail volume. USPS also tracks some mail for
diagnostic purposes. However, several impediments continue to hinder
USPS's ability to develop representative delivery measures for all of its
major types of mail against USPS delivery standards, which specify the
maximum number of days from entry to delivery for mail to be delivered in
a timely manner. Impediments to measure end-to-end delivery time (i.e.,
the time from entry to delivery) include:
o The lack of adequate and continued management commitment and
effective collaboration with the mailing industry to follow
through on recommendations for improvements and to resolve issues
between USPS and mailers is an overall theme in understanding the
slow progress being made in developing and implementing methods of
measuring performance.
o USPS has partially implemented technology that would allow it
to track barcoded mail through its mail processing and
transportation networks. Implementation of this technology is a
multi-year project and could play a part in measuring delivery
performance when completed.
o There has been limited mailer participation in applying unique
barcodes to mail pieces for tracking purposes.
o Incomplete and inaccurate data from USPS and mailers about when
USPS receives bulk mail make it difficult to know when to "start
the clock" on measuring delivery performance for this mail.
While USPS has taken a number of positive steps to transform its
operations over the years, it has not implemented several key
recommendations that have been made since the early 1990s to
improve its delivery standards and measure delivery performance
for all major types of mail, particularly for high-volume types of
mail, such as Standard Mail and bulk First-Class Mail. These
recommendations were made in 1992, 1997, 1999, and 2004 by
committees consisting of representatives of USPS and the mailing
industry. Further, USPS has no current plans to implement
additional representative measures of delivery performance. Senior
USPS officials told us that it would be too costly for USPS to
measure delivery performance by tracking all 210 billion pieces of
mail every year. However, these concerns about cost could be
addressed by exploring sampling options or other approaches in
collaboration with mailers to determine how best to measure
delivery performance at much less cost than attempting to track
every mail piece. Such collaboration would also allow the parties
to determine their information needs, explore cost trade-offs
associated with various options, and resolve associated data
quality issues. We recognize that it will take time to resolve
impediments to implementing additional delivery performance
measures. However, USPS's leadership, commitment, and effective
collaboration with mailers are critical elements to implementing a
complete set of delivery performance measures that will enable
USPS and its customers to understand the quality of delivery
services, identify opportunities for improvement, and track
progress in achieving timely delivery.
We are making recommendations to USPS that include:
o modernizing delivery standards for all major types of mail to
reflect USPS operations;
o providing a clear commitment to develop a complete set of
representative delivery performance measures;
o implementing representative delivery performance measures for
all major types of mail by providing more effective collaboration
with mailers and others; and,
o improving the transparency of delivery performance standards,
measures, and results by publicly disclosing more information,
including in its Comprehensive Statement and other annual
performance reports to Congress, as well as providing easily
accessible information on its Web site.
In commenting on a draft of this report, USPS disagreed that some
of its delivery standards are outdated. However, we did not make
changes to the report because USPS's outdated standards do not
reflect changes in how major types mail are prepared and
delivered. Further, USPS recognized that its delivery performance
measurement and reporting are not complete and provided detailed
information about its ongoing and planned efforts to ultimately
measure service performance and provide transparency for all
classes of mail. USPS stated that it intends to lead the efforts
required to reach this goal by working collaboratively with others
in the mailing industry. USPS's letter also emphasized improving
service-an emphasis we agree with-but we continue to have
questions about whether USPS's measurement efforts will result in
representative delivery performance measures for all major types
of mail. For most major types of mail, USPS's vision of service
performance measurement is generally limited to tracking mail
through its mail processing and transportation networks, which is
not the same as measuring end-to-end delivery performance against
USPS delivery standards. USPS did not directly comment on three of
our four recommendations. On our fourth recommendation concerning
improving the transparency of delivery performance standards,
measures, and results, USPS commented that its standards should be
more visible and stated that it is exploring making information
related to its standards available through additional channels,
including its Web site.
Background
USPS is an independent establishment of the executive branch
mandated by law to provide postal services to "bind the nation
together through the personal, educational, literary, and business
correspondence of the people."5 Established by the Postal
Reorganization Act of 1970,6 USPS is a vital part of the nation's
communications network, delivering more than 200 billion pieces of
mail each year. USPS is required to provide "prompt, reliable, and
efficient services to patrons in all areas" and "postal services
to all communities," including "a maximum degree of effective and
regular postal services to rural areas, communities, and small
towns where post offices are not self-sustaining."7 In determining
all policies for postal services, USPS is mandated to "give the
highest consideration to the requirement for the most expeditious
collection, transportation, and delivery of important letter
mail."8 Also, in selecting modes of transportation, USPS is
mandated to "give highest consideration to the prompt and
economical delivery of all mail."9 More generally, USPS is
mandated to provide adequate and efficient postal services that
meet the needs of different categories of mail and mail users.10
USPS has designated improving service as one of its four goals in
its Strategic Transformation Plan.11 USPS's strategy to improve
service is to "provide timely, reliable delivery, and improved
customer service across all access points." Specifically, USPS
plans to improve the quality of postal services by continuing to
focus on the end-to-end service performance of all mail. The
quality of mail delivery service has many dimensions, including
the delivery of mail to the correct address within a time frame
that meets standards USPS has established for timely delivery.
USPS also plans to ensure that postal products and services meet
customer expectations and that all customer services and forms of
access are responsive, consistent, and easy to use. USPS has long
recognized the importance of customer satisfaction and measures
the satisfaction of its residential and business customers on a
quarterly basis. USPS reports that its customer satisfaction
measurement, which is conducted by the Gallup Organization,
provides actionable information to USPS managers by identifying
opportunities to improve overall customer satisfaction. In
addition to gauging overall customer satisfaction, USPS measures
customer satisfaction related to specific postal functions such as
mail delivery and retail service. As USPS recognizes, dissatisfied
customers can seek and find alternatives to using the mail. USPS
faces growing competition from electronic alternatives to mailed
communications and payments as well as private delivery companies.
In this challenging environment, establishing and maintaining
consistently high levels of delivery service are critical to
success.
Recognizing the importance of the timely delivery of mail, USPS
has integrated performance targets and results for some types of
mail into its performance management system. This system is used
to establish pay-for-performance incentives for postal management
employees. As we have reported, high-performing organizations use
effective performance management systems as a strategic tool to
drive change and achieve desired results. Among the key practices
used is aligning individual performance expectations with
organizational goals12 by seeking to create pay, incentive, and
reward systems that clearly link employee knowledge, skills, and
contributions to organizational results. Further, high-performing
organizations often must fundamentally change their cultures so
that they are more results oriented, customer focused, and
collaborative in nature. As we have reported, the benefit of
collecting performance information is only fully realized when
this information is actually used by managers to make decisions
oriented toward improving results. Performance information can be
used to identify problems and take corrective action; develop
strategy and allocate resources; recognize and reward performance;
and identify and share effective approaches. Practices that can
contribute to greater use of performance information include
demonstrating management commitment; aligning agencywide goals,
objectives, and measures; improving the usefulness of performance
information; developing capacity to use performance information;
and communicating performance information clearly and
effectively.13
Some USPS Delivery Standards Are Not Useful and Transparent
and Do Not Reflect Current Mail Operations
Some USPS standards for timely mail delivery are inadequate
because of limited usefulness and transparency. In general, these
standards have not kept up with changes in the way that USPS and
mailers prepare and process mail for delivery. Outdated standards
are unsuitable as benchmarks for setting realistic expectations
for timely mail delivery, measuring delivery performance, or
improving service, oversight, and accountability.
According to USPS, service standards represent the level of
service that USPS strives to provide to customers. These standards
are considered to be one of the primary operational goals, or
benchmarks against which service performance is to be compared in
measurement systems. USPS has established standards for the timely
delivery of each type of mail; these specify the maximum number of
days for "on-time" delivery based on the time of day, the location
at which USPS receives the mail, and the mail's final destination.
For example, USPS standards for 1-day delivery require the mail to
be received by a specified cutoff time on the day that the mail is
accepted, which varies depending on geographic location and where
the mail is deposited (e.g., in a collection box, at a post
office, or at a mail processing facility). In most cases, 1-day
mail deposited before the cutoff time is considered to be
delivered on time if it is delivered on the next delivery day,
which generally excludes Sundays and holidays. USPS delivery
standards vary according to the priority of delivery. Express Mail
has the highest priority, followed by Priority Mail, other
First-Class Mail, Periodicals, Package Services (e.g., packages
sent via Parcel Post), and Standard Mail.
Postal officials, including the Postmaster General, told us that
differences in postage rates for different types of mail reflect
differences in delivery standards and priority. The Postmaster
General noted that variability in the delivery standards and
timing of delivery is built into USPS's pricing structure. He
noted that lower-priced mail with lower delivery priority receives
more variable delivery; this includes mail such as Standard Mail
which receives discounts for presorting by ZIP Code and
destination entry that is generally closer to where the mail is
delivered. For example, USPS can defer the handling of Standard
Mail as it moves through its mail processing, transportation, and
delivery networks. Thus, some pieces of a large mailing of
Standard Mail may be delivered faster than others. The Postmaster
General explained that this variability of delivery is consistent
with the relatively low rates afforded to mailers of Standard
Mail, who pay lower rates than mailers of First-Class Mail.
In addition, standards for types of mail within each class can
vary. For example, Parcel Select, a type of Package Service, has a
faster delivery standard than other Package Services because it is
made up of bulk shipments of packages entered into USPS's system
close to the final destination. Delivery standards for each class
and type of mail are summarized in table 1 and described in
greater detail in appendix II.
339 U.S.C. S:2401(e), initially added as 39 U.S.C. S:2401(g) by Pub. L.
94-421, Postal Reorganization Act Amendments of 1976.
4The PRC's Office of the Consumer Advocate represents the interests of the
general public. The written agreement with USPS is available at
http://www.prc.gov/docs/46/46232/OCA_Notice_with_Letter.pdf .
Background
539 U.S.C. S:101.
6The Postal Reorganization Act of 1970 (Pub. L. No. 91-375) reorganized
the former U.S. Post Office Department into the U.S. Postal Service and
created PRC.
739 U.S.C. S:101.
839 U.S.C. S:101(e).
939 U.S.C. S:101(f).
1039 U.S.C. S:403.
11USPS, Strategic Transformation Plan 2006-2010 (Washington, D.C.: Sept.
2005).
12GAO, Results-Oriented Cultures: Creating a Clear Linkage between
Individual Performance and Organizational Success, GAO-03-488 (Washington,
D.C.: Mar. 14, 2003).
13GAO, Managing for Results: Enhancing Agency Use of Performance
Information for Decision-Making, GAO-05-927 (Washington, D.C.: Sept. 9,
2005).
Some USPS Delivery Standards Are Not Useful and Transparent and Do Not Reflect
Current Mail Operations
Table 1: Summary of USPS Delivery Standards for Timely Delivery of Mail
Source: USPS.
Note: Mail volume data are for fiscal year 2005.
aThe range of days shown in this table summarizes USPS delivery standards
for each class and type of mail, which vary depending on the ZIP Codes
where each mail piece enters the postal system and is delivered.
bStandards range from 2 to 9 days for Package Services mail within the
continental United States, except for Alaska and Hawaii, for which no
Package Service standards exist, and except for Parcel Select, for which
standards range from 1 to 3 days.
cFor purposes of this figure, First-Class Mail does not include Priority
Mail.
Some USPS Delivery Standards Have Limited Usefulness
Some USPS delivery standards lack usefulness-notably, the delivery
standards for Standard Mail, Periodicals, and most Package Services
mail-because they have not been systematically updated in many years and
do not reflect USPS's operations or intended service. These standards are
loosely based on distance and have tended to remain static despite changes
in USPS networks, operations, and operational priorities.
Delivery Standards for Standard Mail
The delivery standards for Standard Mail are outdated. Although delivery
standards are supposed to represent the level of delivery service USPS
strives to provide to customers, differences between delivery standards
and operational policies and practices for delivery service are evident
for Standard Mail. For example, USPS operational policies state that
Standard Mail entered at the delivery unit, where carriers pick up mail
for final delivery, should be delivered in 2 days, whereas the standards
call for such delivery in 3 days. Also, depending on mail preparation,
such as presorting and destination entry, mail can be delivered faster
than the standard. These differences can impede clear communication to
mailers concerned with setting realistic expectations for when Standard
Mail will be delivered and determining how to maximize the value of their
mail. Correctly anticipating when advertising mail will be delivered is
important to business planning and profitability. For example:
o Local retailers, ranging from department stores to restaurants,
need realistic expectations as to when advertising mail will be
delivered in order to effectively promote sales and plan for the
appropriate level of staffing and inventory. To maximize customer
response, retailers send advertising mail so that it will be
received shortly before a sale-soon enough for potential customers
to plan to shop during the sale, but not so early that they will
forget about the sale. Also, if the advertising is delivered far
in advance of a weekly sale, it can generate demand that is
difficult to meet with available resources.
o Catalog companies also need realistic expectations about when
catalogs will be delivered in order to plan for call center
staffing and inventory.
Thus, reliable and predictable delivery of advertising mail helps
businesses efficiently schedule staff and inventory to respond to
fluctuations in demand. Anticipating the level of inventory has
become more important over time with the trend toward just-in-time
inventory that helps minimize storage and financing costs.
However, the delivery standards for Standard Mail are not adequate
for advertisers to set realistic expectations for mail delivery,
in part because these standards do not reflect some operational
policies and practices that can lead to mail being delivered
faster or slower than the standards call for.
Substantial changes have occurred in how mailers prepare Standard
Mail and how USPS processes it, but these changes are not
reflected in the standards. Today, most Standard Mail is presorted
and entered into the postal system close to its destination. The
degree of presorting and destination entry alters the amount of
handling it receives by USPS and potentially speeds or slows
delivery. For example:
o Presorting: Beginning in 1979, USPS provided discounts to
mailers who reduce USPS's processing costs by presorting their
Standard Mail to the level of carrier delivery routes-discounts
extended in 1981 to Standard Mail presorted to the level of
individual ZIP Codes. In fiscal year 2005, most Standard Mail was
presorted by carrier routes (35 percent) or by individual ZIP
Codes or ZIP Codes starting with the first three digits (57
percent). Mail that is presorted by carrier route can move through
USPS's system faster than mail that is presorted by groups of ZIP
Codes because it does not need as much handling by USPS. However,
the delivery standards for Standard Mail do not take presorting
into account.
o Destination entry: Starting in 1991, USPS gave destination
entry discounts for mailers that deliver their Standard Mail to a
postal facility that generally is closer to the mail's
destination, such as the delivery unit facility where carriers
pick up their mail or the local mail processing center that
forwards mail to these facilities. Mail that is entered at a
destination facility is delivered faster than other Standard Mail
because it avoids some USPS handling and USPS assigns a low
priority to handling Standard Mail. However, the impact of
destination entry is not reflected in the delivery standards. For
example, the delivery standards continue to call for delivering
all Standard Mail in 3 days or more, whereas the Postal Operations
Manual states that Standard Mail that mailers enter at delivery
units should be delivered in 2 days.
USPS also works with mailers to deliver their Standard Mail within
a range of dates that they request. Advertising mailers can
request that their advertising be delivered within this
range-known as the "in home" dates. As mentioned earlier,
predictable delivery helps advertisers to plan their resources and
inventory. Requesting "in home" dates may result in delivery that
is faster or slower than the standard. The Postal Operations
Manual states that in such cases, delivery units should attempt to
meet the "in home" dates rather than the delivery standards.
According to USPS, its delivery standards are supposed to be the
benchmark against which delivery performance is compared and
reflects the level of service that USPS strives to provide. In
this case, however, the delivery standards for Standard Mail would
not be a suitable benchmark for measuring delivery performance,
because they do not reflect USPS operations.
USPS provided mailers with guidelines in 2000 that recognized that
Standard Mail can be delivered faster than the standard, depending
on its level of presorting, and on whether the mailers deliver it
closer to its destination. The guidelines presented a table for
the speed of Standard Mail delivery depending on how the mail was
presorted and where it entered the mail processing network.
However, USPS did not consider these guidelines to be part of its
delivery standards for Standard Mail, and according to USPS, these
guidelines are now obsolete. Nevertheless, USPS officials told us
that USPS continues to maintain internal guidelines for the
desired delivery speed for Standard Mail, depending on its level
of presorting and where it enters the postal network.
In 1992, 1997, and 1999, various committees composed of USPS
officials and mailers recommended that delivery standards be
improved for Standard Mail and other types of mail. In 1999, a
working group of USPS officials and mailers recommended that the
delivery standards for Standard Mail be updated to reflect how it
is presorted and where the mail enters the postal system. USPS did
not implement these 1999 recommendations and offered no
explanation on why it did not. Then, when we met with Postmaster
General in June 2006, he told us that it would be difficult for
USPS to update its standards to reflect the wide variety of
differences in mail preparation and processing, and that it might
have an impact on the rates for some types of mail, to which he
believes the mailers would object. In contrast, the Association
for Postal Commerce (PostCom), a major mailer group, wrote the
following to us in March 2006: "It is PostCom's belief that the
development and publication of service standards based on existing
USPS operations and networks is a critical first step toward the
development of any service performance measurement system. There
is no barrier to moving forward with defining service standards
for all classes of mail." PostCom noted it actively supported the
efforts of the 1999 working group, and said its
recommendations-which included calling for standards based on
existing mail processing and transportation environments, which
for bulk mail would also reflect mail preparation and entry
point-"largely still apply."
Because outdated delivery standards are an impediment to measuring
and improving delivery performance, updating these standards could
help increase the value of Standard Mail to businesses that mail
advertising. As previously noted, understanding when Standard Mail
will be delivered helps mailers send this mail so it will be
delivered at what they consider to be the optimum time and helps
them to plan for staff and inventory. In addition, updating the
delivery standards for Standard Mail would provide an appropriate
benchmark for measuring Standard Mail delivery performance.
Delivery Standards for Package Services
For some of the same reasons as Standard Mail, delivery standards
are likewise outdated for most Package Services mail. Delivery
standards for most Package Services also date to the 1970s and are
generally distance-based. These standards are predicated on USPS's
national network of Bulk Mail Centers (BMCs) that accept and
handle packages. USPS told us that the delivery standards for
Package Services "are changed infrequently since the BMC network
has not been appreciably altered since its inception in the
1970s." Since the 1970s, USPS has implemented many changes
regarding the handling of packages, including discounts for
presorting Package Services items to the carrier route or ZIP
Code, as well as discounts for destination entry. However, these
changes have not been reflected in changes to the Package Services
standards.
A noteworthy exception involves useful delivery standards that
USPS created for a specific type of Package Services mail called
Parcel Select, when it was introduced in 1999. These standards
were updated in 2002. USPS's standards for Parcel Select
differentiate speed of delivery by point of entry, e.g., 1 day for
entry at the destination delivery facility or 2 days for entry at
the mail processing center that forwards the parcels to the
delivery facility. These standards were intended to provide an
appropriate benchmark for delivery performance measurement in
order to facilitate efforts to improve the delivery performance
for this mail. USPS subsequently collaborated with officials of
the Parcel Shippers Association (PSA) to implement delivery
performance measurement for Parcel Select against these standards,
and the results are factored into individual pay-for-performance
incentives for many USPS managers.
Both USPS and PSA officials told us that incorporating delivery
performance results into these incentives-which was possible due
to useful performance standards and measures-was a primary reason
why on-time delivery performance has improved for Parcel Select.
They said that as a result of improved delivery performance,
Parcel Select has been able to maintain its viability as a
low-cost alternative for lightweight packages within the
competitive packages market. In this regard, we have also reported
that both establishing and maintaining consistently high levels of
delivery service are critical to USPS's success in an increasingly
competitive marketplace.14 Further, we have noted that USPS had
lost Parcel Post business to private carriers, who had come to
dominate the profitable business-to-business segment of the market
because they offered cheaper and faster service.
Parcel Select provides destination entry discounts for bulk
mailings of Parcel Post. Most of Parcel Select's volume is
tendered to USPS by a handful of third-party consolidators who
receive packages from multiple companies and consolidate their
volume to enable cost-effective destination entry. By entering
parcels closer to their destination, the consolidators speed
delivery and narrow the delivery window. However, prior to
measuring and improving the delivery performance of Parcel Select,
mailers considered Parcel Select to be a low-cost service with a
reputation for low quality delivery. The delivery performance data
has been used to identify delivery problems in a timely manner,
such as problems in timely delivery of Parcel Select in specific
geographic areas, so that corrective action could be taken to
maintain and improve delivery performance. USPS actions to improve
the performance of Parcel Select are consistent with practices we
have reported are used by high-performing organizations: using
performance information and performance management systems to
become more results oriented, customer focused, and collaborative
in nature; identify problems and take corrective action; and
improve effectiveness and achieve desired results.15
Delivery Standards for Periodicals
As with Standard Mail and most Package Services, delivery
standards are outdated for Periodicals that are delivered outside
the local area from which they are mailed. The distance-based
concept for Periodicals standards has remained the same since the
1980s and does not reflect mailers presorting mail by carrier
route or ZIP Code or destination entry of mail at destination
facilities. Like Standard Mail, USPS told us that the Periodicals
delivery standards are meant to represent the maximum service
standard targets for mail that is not presorted. However, the
impact of presorting has not been incorporated into the
Periodicals delivery standards.
In contrast, to USPS's credit, it has updated its 1-day delivery
standards for Periodicals delivered within the local area where
they are mailed. Further, it generally updates the standards at
the same time for Periodicals and First-Class Mail that originate
and destinate in the same local area so that the scope of 1-day
delivery remains the same for both types of mail.
Looking forward, USPS plans to change the way its mail processing
and transportation networks handle Periodicals mail this summer,
which USPS officials said will lead to changes in some Periodicals
delivery standards so that they reflect current operations. They
said that Periodicals that are moved via ground transportation,
which make up a majority of all Periodicals volume, will be
combined with First-Class Mail. As a result, these Periodicals
should receive comparable handling and faster delivery times than
is currently the case. According to Periodicals mailers,
inconsistent delivery performance that does not meet customer
expectations causes renewal rates to decline and leads to customer
service calls that are costly to handle. According to USPS
officials, implementation of these planned changes to postal
operations and standards can be expected to result in updating
many of the specific standards for Periodicals mailed between
specific pairs of ZIP Codes.
Delivery Standards for Priority Mail
Some of the specific delivery standards for Priority Mail may also
need to be updated because they do not reflect USPS's operations.
According to the Deputy Postmaster General, some Priority Mail
delivery standards call for on-time delivery of Priority Mail in 2
days, but it is often physically impossible for USPS to meet these
standards when that requires moving the mail across the country.
As we reported in 1993, officials of the Postal Inspection Service
questioned whether Priority Mail could be delivered everywhere
within the continental United States within 2 days, which was then
the delivery standard.16 USPS has since established 3-day delivery
standards for some Priority Mail, but these standards cover less
than 5 percent of Priority Mail volume. USPS officials told us
that USPS may make changes to some of the specific Priority Mail
standards for mail sent between specific pairs of ZIP Codes so
that the standards reflect USPS operations.
Delivery Standards for First-Class Mail
USPS has updated its standards for First-Class Mail over the years
with the intent of reflecting its operations. However, questions
have been raised in PRC proceedings and advisory opinions about
some of the changes.17 By way of background, when USPS decides on
a change in the nature of postal services that will generally
affect service on a nationwide or substantially nationwide basis,
USPS is required by law to submit a proposal, within a reasonable
time frame prior to its effective date, to PRC requesting an
advisory opinion on the change. In 1989, USPS submitted a proposal
to PRC for an advisory opinion that involved a national
realignment of the delivery standards for First-Class Mail. This
realignment involved downgrading the delivery standards for an
estimated 10 to 25 percent of First-Class Mail volume, so that
these standards would reflect actual operations or planned changes
to operations. In general, these delivery standards were proposed
to be downgraded by reducing the size of 1-day delivery areas,
thereby downgrading some mail to 2-day service, and likewise
reducing the scope of 2-day delivery, thereby downgrading some
mail to 3-day service. USPS also stated that it would make changes
to its operations, including moving some First-Class Mail by truck
instead of by air, and that it expected to provide more reliable
service as a result.
PRC advised against adoption of USPS's proposed national
realignment, explaining that its review suggested the realignment
may be an excessive reaction to what may be localized problems on
a limited scale. PRC questioned if the proposed realignment could
bring about significant improvement in delivery service
commensurate with its effect on mail users. However, PRC agreed
that existing delivery standards could not be met in certain
areas, such as the New York City metropolitan area, and on that
basis, said that some specific localized changes to the service
standards to correct anomalies and major problem areas would be a
sensible path for USPS to pursue. USPS proceeded to implement a
national realignment to its First-Class Mail standards from 1990
to 1992.
In 2000 and 2001, USPS again changed many of its First-Class Mail
standards in a manner that USPS said would have a nationwide
impact on service, including downgrading some standards from 2
days to 3 days in the western United States and upgrading other
standards. USPS reported that these changes were intended to
provide consistent and timely delivery service for 2-day and 3-day
mail. USPS also reported that the changes reflected a general
trend toward making 2-day zones more contiguous, more consistent
with the "reasonable reach" of surface transportation from each
originating mail processing facility, and potentially less
dependent on air transportation-which had lacked reliability. USPS
did not seek a PRC opinion on these changes in the year before
implementation.
After a lengthy proceeding regarding the 2000 and 2001 changes,
PRC issued an advisory report earlier this year that suggested
that USPS reconsider its First-Class Mail standards, stating that
the service resulting from the realignment cannot be said to be
sufficient to meet the needs of postal patrons in all areas as
required by law and that USPS did not consistently adhere to the
statutory requirement to give highest consideration to expeditious
transportation of important letter mail.18 PRC urged USPS to give
more effective public notice about First-Class Mail delivery
standards, such as through Web-site postings and collection box
labels. More generally, PRC also urged USPS to actively engage the
public in major policy decisions and fully inform the public about
matters of direct interest that affect USPS operations. PRC said
that USPS, as a government monopoly, has a positive obligation to
learn the needs and desires of its customers and to structure its
products to meet them where doing so is not inconsistent with
reasonably feasible and efficient operations.
In February 2006, USPS sought a PRC advisory opinion, which is
pending, in connection with USPS's realignment of its mail
processing and transportation networks.19 USPS is currently
planning and implementing a nationwide realignment of its mail
processing and transportation networks. According to USPS, its
long-term operational needs will be met best if its mail
processing network evolves into one in which excess capacity is
reduced and redundant operations and transportation are
eliminated. USPS stated that it is not proposing to change the
long-standing delivery standard ranges for any particular mail
class; however, any changes to delivery standards that affect the
expected delivery times from origin to destination between
particular 3-digit ZIP Code pairs will be made incrementally as
USPS implements changes to its networks.20 USPS also stated that
the overall magnitude and scope of potential service standard
upgrades and downgrades for any particular mail class cannot be
known until numerous feasibility reviews have been conducted and
operational changes implemented over the next several years.
However, USPS stated that it expected that changes to its delivery
standards are likely to be most pronounced for First-Class Mail
and Priority Mail.
Delivery Standards for Express Mail
USPS has also made changes to its delivery standards for Express
Mail to reflect changes in operations. Similar to the delivery
standards for First-Class Mail, those for Express Mail were
discussed in a PRC proceeding after USPS implemented changes to
them. In April 2001, USPS reduced the scope of the overnight
delivery network for Express Mail sent on Saturdays and the eve of
holidays. According to USPS, it had contracted with FedEx to
provide more reliable air transportation for Express Mail; but,
because FedEx provided no service on Saturday or Sunday nights and
some federal holidays, USPS changed its delivery plans for mail
pieces accepted on Saturdays and the eve of holidays. Earlier this
year, PRC issued an advisory report that found the changes to the
Express Mail network had affected service on a substantially
nationwide basis in 2001. PRC criticized the lack of public notice
before the changes were made, but unlike its advisory opinions on
changes to First-Class Mail standards, did not criticize the
changes that USPS made to its Express Mail standards.21
Proposed Postal Reform Legislation and Delivery Standards
Over the past year, the House and Senate have passed postal reform
legislation that would clarify USPS's delivery standards. The
House-passed legislation would require USPS to annually report its
delivery standards for most types of mail and the level of
delivery service provided in terms of speed and reliability. The
Senate-passed legislation included more detailed requirements
regarding delivery service standards.22 This bill would require
USPS to establish "modern service standards" within 1 year after
the bill is enacted. These standards would have four statutory
objectives: (1) to enhance the value of postal services to both
senders and recipients; (2) to preserve regular and effective
access to postal services in all communities, including those in
rural areas or where post offices are not self-sustaining; (3) to
reasonably assure USPS customers of the reliability, speed, and
frequency of mail delivery that is consistent with reasonable
rates and best business practices; and (4) to provide a system of
objective external performance measurements for each
market-dominant product (e.g., mail covered by the postal
monopoly) as a basis for measuring USPS's performance. In
addition, USPS would be required to take into account eight
statutory factors in establishing or revising its standards: (1)
the actual level of service that USPS customers receive under any
service guidelines previously established by USPS or service
standards established under the new statutory system; (2) the
degree of customer satisfaction with USPS's performance in the
acceptance, processing, and delivery of mail; (3) the needs of
USPS customers, including those with physical impairments; (4)
mail volume and revenues projected for future years; (5) the
projected growth in the number of addresses USPS will be required
to serve in future years; (6) the current and projected future
costs of serving USPS customers; (7) the effect of changes in
technology, demographics, and population distribution on the
efficient and reliable operation of the postal delivery system;
and (8) the policies of Title 39 (i.e., the postal laws) and such
other factors as USPS determines appropriate. Like the
House-passed bill, the Senate-passed bill would require USPS to
annually report on the speed and reliability of delivery of most
types of mail.
In explaining the rationale for these requirements regarding
delivery standards and service, sponsors of the Senate bill stated
that the new standards would improve service, be used by USPS to
establish performance goals, and continue to ensure daily delivery
to every address, thereby preserving universal service. A Senate
committee report on an earlier version of these requirements
stated that they were intended to ensure that the service USPS
provides is consistent with the statutory definition of universal
service, as well as preserving and enhancing the value of postal
products. In this regard, the report expressed concern that USPS
may be tempted to erode service quality in an effort to cut costs,
and stated that the reporting requirements would provide
information to enable the postal regulator and all interested
parties to evaluate the provision of service, with the service
standards serving as a benchmark for measuring USPS's
performance.23
USPS Delivery Standards Lack Adequate Transparency
Although USPS has recently provided information related to its
delivery standards in ongoing PRC proceedings, USPS has not made
all of this information easily accessible to all business mailers
and the public. As a result, some customers are hindered from
making informed decisions about different mailing options with
varying rates and service, as well as from assessing USPS's
delivery performance. Although USPS does have a CD-ROM with
information about its delivery standards that is freely available
to those who are aware of its existence, information about how to
order the CD-ROM is not easily accessible on its Web site. The
CD-ROM contains delivery standards for some types of mail, such as
Standard Mail and Periodicals, which are not available on its Web
site. Looking forward, USPS has the opportunity to further expand
the accessibility of information on its delivery standards, much
as USPS has done to improve the transparency of its financial
information in recent years. For example, in an ongoing PRC
proceeding, USPS provided new narrative summaries that explain its
detailed standards; these summaries are posted on the PRC Web
site, but not on the USPS Web site.
USPS Measurement and Reporting Of Delivery Performance Information
Is Inadequate
USPS's delivery performance measurement and reporting is
inadequate-in part because its delivery performance information is
incomplete, since representative measures of delivery performance
do not cover most mail, and in part because its reporting of this
delivery performance information is deficient (see table 2). USPS
tracks some mail pieces for diagnostic purposes, and plans to have
more data available as it deploys automated equipment to sort
flat-sized mail into the order it is delivered. However, a number
of impediments have limited USPS's ability to track mail. The
diagnostic data is not representative and does not amount to
delivery performance measurement. Although USPS recently added a
section on domestic delivery performance to its Web site, it does
not provide complete performance information for some types of
mail. Without complete information, USPS and mailers are unable to
diagnose delivery problems so that corrective action can be
implemented. In addition, stakeholders cannot understand how well
USPS is fulfilling its basic mission, nor can they understand
delivery performance results and trends. Deficiencies in
measurement and reporting also impair oversight and accountability
by PRC and Congress.
Table 2: USPS Measurement and Reporting of Timely Delivery
Performance
Source: GAO analysis of USPS information.
aNo representative measure of delivery performance exists for this
mail. Some mailers pay an additional fee to obtain data on the
progress of their mail through USPS's mail processing system.
However, these data are not representative, cover less than 2
percent of total mail volume, and do not include data on the date
of delivery.
Note: Timely delivery performance is measured based on comparing
the time for USPS to deliver mail against USPS's delivery
standards. Reporting includes material on USPS's Web site. For
purposes of this table, First-Class Mail does not include Priority
Mail. Volume and revenue data are for fiscal year 2005 and do not
add up to 100 percent because they do not include some small and
unrelated types of mail.
USPS Delivery Performance Measurement Is Not Complete
USPS has not established a complete set of quantitative measures
for delivery performance, largely because its delivery performance
measurement covers less than one-fifth of its total mail
volume-that is, only Express Mail and parts of First-Class Mail,
Priority Mail, Package Services, and International Mail. USPS does
not measure delivery performance for the remaining volume, which
includes Standard Mail, bulk First-Class Mail, Periodicals, and
most Package Services. In addition, the External First-Class
Measurement System (EXFC) is limited to single-piece First-Class
Mail deposited in collection boxes in selected areas of the
country (see fig. 1). Thus, as USPS has reported, EXFC is not a
systemwide measurement of all First-Class Mail performance. USPS
has stated that it has strong business and operational reasons for
using this EXFC methodology and that the areas selected for
testing ensure coverage of its highest-volume areas. These reasons
include EXFC covering areas from which most First-Class Mail
originates and destinates, the ability of EXFC to provide results
for specific geographic areas, and practical advantages for
collecting data from fewer areas of the nation.
Delivery Standards for Package Services
Delivery Standards for Periodicals
14GAO, U.S. Postal Service: New Focus on Improving Service Quality and
Customer Satisfaction, GAO/GGD-96-30 (Washington, D.C.: Dec. 20, 1995).
15 GAO-05-927 , GAO-03-488 .
Delivery Standards for Priority Mail
Delivery Standards for First-Class Mail
16GAO, Priority Mail: Advertised 2-Day Service Is Not Guaranteed,
GAO/GGD-93-122 (Washington, D.C.: July 16, 1993).
17Although Priority Mail is classified as a subclass of First-Class Mail,
for purposes of this report, "First-Class Mail" refers to First-Class Mail
that does not include Priority Mail.
18PRC, Commission Report: Complaint on First-Class Mail Standards Service,
Docket No. C2001-3 (Washington, D.C.: Apr. 17, 2006).
19PRC Docket No. N2006-1, Evolutionary Network Development Service
Changes, 2006.
20A 3-digit ZIP Code area includes all addresses with the same first three
digits of the ZIP Code.
Delivery Standards for Express Mail
Proposed Postal Reform Legislation and Delivery Standards
21PRC, Order on Complaint on Express Mail, Docket No. C2005-1 (Washington,
D.C.: Apr. 18, 2006).
22The reporting requirements in the House and Senate postal reform bills
do not cover types of mail classified as "competitive" such as Express
Mail and Priority Mail.
23S. Rept. 108-318, to accompany S. 2468, at 22-23 (2004).
USPS Delivery Standards Lack Adequate Transparency
USPS Measurement and Reporting Of Delivery Performance Information Is Inadequate
USPS Delivery Performance Measurement Is Not Complete
Figure 1: Geographic Coverage of Delivery Performance Measurement for
First-Class Mail Deposited in Collection Boxes as Measured by EXFC
Note: Areas covered by EXFC are shaded. Boundaries within states are for
3-digit ZIP Code areas.
Similarly, delivery performance data for Priority Mail are limited because
they only cover Priority Mail volume entered at post offices and other
retail facilities, and for which mailers purchase Delivery Confirmation
Service.24 Such mail constitutes only 4 percent of all Priority Mail
volume. According to USPS officials, USPS expects the volume of this
Priority Mail to increase, which would increase the scope of delivery
performance measurement. They said that this measure, which replaced the
former Priority End-to-End (PETE) measurement system at the beginning of
fiscal year 2006, covers all types of Priority Mail, including letters,
flat-sized mail, and parcels. However, USPS officials also told us that
USPS cannot currently measure the delivery performance for bulk quantities
of Priority Mail with Delivery Confirmation, such as business mailings of
merchandise, because USPS does not have accurate data on when the mail
entered into its system.
24Delivery Confirmation service provides mailers with the date and time of
delivery or attempted delivery.
On the positive side, USPS has implemented delivery performance
measurement for Parcel Select and some types of International Mail, both
of which operate in a highly competitive marketplace. It has used this
measurement to establish targets and identify opportunities to improve
service. Although these products are a small fraction of mail volume, USPS
has developed delivery performance measures to address customer needs for
timely delivery. Highlights for measurement of major types of mail are
listed in table 3.
Table 3: USPS Delivery Performance Measurement by Type of Mail
Source: GAO analysis of USPS information.
As a result of the measurement gaps listed above, measurement is not
sufficiently complete to understand how well USPS is achieving the
following:
o performing its statutory mission of providing prompt and
reliable service to patrons in all areas, including prompt
delivery of all mail;
o delivering mail with different delivery standards, which helps
fulfill the requirement that USPS provide mail service to meet the
needs of different categories of mail and mail users;
o providing expeditious handling of important letter mail, such
as bills and statements sent via First-Class Mail;
o fulfilling its statutory requirement to provide a maximum
degree of effective and regular postal services to rural areas,
communities, and small towns where post offices are not
self-sustaining; and
o identifying delivery problems, understanding the causes, and
improving performance.
The lack of any representative delivery performance data for most
mail volume increases the financial risk to USPS, which faces
increasing competition. If mailers are not satisfied with USPS's
delivery service, they could take their business elsewhere. For
example, Standard Mail and bulk First-Class Mail are the largest
segments not measured, collectively accounting for close to
three-quarters of mail volume and half of mail revenues. Standard
Mail is USPS's key growth product, but it must compete against
multiple advertising media in a dynamic and highly competitive
marketplace. Bulk First-Class Mail covers a significant share of
USPS's overhead costs-including maintaining the retail and
delivery networks-but is vulnerable to electronic communications
and payment alternatives. In addition, USPS does not have
representative delivery performance measures for Periodicals,
which help USPS fulfill its statutory mandate to provide postal
services to "bind the nation together" through business,
educational, and literary correspondence; and for Package
Services, such as Parcel Post, which provides the public with a
low-cost option for sending packages.
Incomplete information also impedes USPS's potential for holding
its managers accountable for delivery performance of all types of
mail and for balancing increasing financial pressures with the
need to maintain quality delivery service. Because delivery
performance is measured for only some types of mail, and
individual performance incentives are linked to the results, some
mailers are concerned that in practice, this may skew delivery
priorities and performance so that timely delivery is more
important for the mail whose performance is measured than mail
whose performance is not measured. For example, as we have
reported, soon after USPS implemented its EXFC measurement system
for First-Class Mail deposited into collection boxes, USPS
increased its emphasis on timely First-Class Mail service.25 USPS
managers at the local post office level were instructed to
concentrate on particular activities that could improve EXFC
scores, and more emphasis was placed on picking up mail from
collection boxes on schedule.
Conversely, measurement gaps may impede effective collaborative
efforts with mailers to quickly identify and resolve delivery
problems, because both USPS officials and mailers have limited
information for diagnostic purposes. In addition, measurement gaps
impede the ability of external stakeholders, including Congress
and PRC, to monitor accountability and exercise oversight.
Measurement gaps cause PRC to consider proposed postal rates
without adequate information on the actual value of the service
provided for each class of mail, which PRC by law must consider
when recommending postal rates. In addition, PRC is hindered in
considering USPS's proposals for changes in the nature of postal
services that are nationwide or substantially nationwide in scope,
including the ongoing proceeding related to USPS's network
realignment.
USPS Reporting of Delivery Performance Lacks Adequate Transparency
USPS's limited performance measurement also affects USPS's
reporting of its delivery performance and does not provide
adequate transparency so that customers can understand performance
results and trends. Although USPS recently made additional
delivery performance information available on its Web site, it
still does not communicate its delivery performance for all of its
major types of mail, particularly those covered by its statutory
monopoly to deliver letter mail.
The main gap in USPS's reporting of delivery performance results,
as shown in table 4, continues to be for mail entered in bulk
quantities, including Standard Mail and bulk First-Class Mail,
which collectively constitute most of USPS's mail volume and
revenues. USPS also does not report delivery performance results
for Periodicals and most Package Services. As previously
discussed, USPS generally does not collect information on delivery
performance results for these types of mail.
USPS Reporting of Delivery Performance Lacks Adequate Transparency
25GAO, Operational Performance of the United States Postal Service,
GAO/T-GGD-91-9 (Washington, D.C.: Mar. 5, 1991).
Table 4: USPS Delivery Performance Reporting by Type of Mail
Source: GAO analysis of USPS information.
aUSPS manages its field operations by dividing the nation into nine
geographic areas and 80 performance clusters.
bhttp://ribbs.usps.gov/files/mtac/exfc/.
USPS's Delivery Performance Reporting Is Not Adequate to Meet Oversight Needs
USPS's reporting of delivery performance information has not adequately
met information needs for congressional oversight purposes. Notably,
USPS's practices for reporting delivery performance information in its
annual Comprehensive Statement on Postal Operations fall short of the
longstanding statutory requirement for "data on the speed and reliability
of service provided for the various classes of mail and types of mail
service."26 This requirement was enacted due to "the need for effective
oversight of postal operations to ensure that the postal services provided
the public shall continue at an effective level and at reasonable
rates."27 Specifically, USPS has not included data on the speed and
reliability of any entire class of mail in its annual Comprehensive
Statement on Postal Operations. Instead, USPS has presented only national
EXFC data, even though it collected data on timely delivery performance
for all Express Mail, as well as some Priority Mail. The 2005
Comprehensive Statement on Postal Operations stated "while Express Mail
and Priority Mail performance is tracked and has improved during the past
5 years, because these products are competitive, the data was considered
proprietary and not published." However, USPS reached an agreement with
the PRC's Office of Consumer Advocate last year to end this restriction
and recently began reporting some delivery performance data on a newly
created page on its Web site for some Express Mail, Priority Mail,
First-Class Mail, and Package Services.
2639 U.S.C. S:2401(e), initially added as 39 U.S.C. S:2401(g) by Pub. L.
94-421, Postal Reorganization Act Amendments of 1976.
Moreover, USPS's reporting practices under the Government Performance and
Results Act (GPRA) of 1993 have provided less and less performance
information for oversight purposes.28 USPS's latest GPRA report, which was
included in its 2005 Comprehensive Statement on Postal Operations,
provided delivery performance targets (also referred to as performance
goals) and results only for First-Class Mail measured by EXFC at the
national level, with little accompanying explanation. For example, USPS
reported that 87 percent of 3-day EXFC mail was delivered on time in
fiscal year 2005, which did not meet its GPRA target of 90 percent, but
USPS did not explain, as required by GPRA, why this specific target was
not met. USPS also did not explain whether it considers the 90-percent
goal-which remains unchanged for fiscal year 2006-impractical or
unfeasible, or, alternatively, what plans USPS has for achieving this
goal.
Delivery Performance Information Has Recently Improved but Remains Incomplete
USPS's reporting of delivery performance information on its Web site has
recently improved but is still incomplete because it does not include
performance results for all major types of mail. In April 2006, USPS
posted delivery performance information on a newly created page of its Web
site, including selected results for the timely delivery of some Express
Mail, Priority Mail, First-Class Mail, and Package Services. This
information is oriented to members of the general public who make
decisions on how to mail parcels and other items that can be sent using
different types of mail. To facilitate such use, the information is linked
to USPS's Postage Rate Calculator and is accompanied by brief summaries of
the applicable delivery standards for each type of mail. The new
information addresses USPS's written agreement with PRC's Office of the
Consumer Advocate29 in the 2005 rate case, which was implemented after
further discussions between the two parties. USPS's recent disclosures are
a good step toward providing easily accessible information on delivery
performance results on its Web site for key types of mail used by the
public.
27H.R. Rep. No. 94-1444, at 14 (1976).
28GPRA requires that USPS submit strategic plans to the President and
Congress, which are to be updated at least every 3 years, and to submit
annual performance plans and annual performance reports to Congress.
The information on delivery performance results, however, did not cover
major types of mail that are not measured-Standard Mail, bulk First-Class
Mail, Periodicals, and most Package Services. Further, the information
provided to the public was limited. First, performance results covered
only the most recent quarter, although results for some types of mail have
varied by 7 percentage points or more from one quarter to another within
the same fiscal year. Second, only partial information was provided for
Priority Mail and Package Services. For example, the results for Priority
Mail covered only 4 percent of total Priority Mail volume. This limited
scope of measurement was not disclosed on USPS's Web site. Without more
complete reporting of delivery performance information, Congress and the
American public do not have adequate information to determine how well
USPS is accomplishing its mission of providing prompt and reliable
delivery services.
For the future, a possible model to enhance the completeness and
usefulness of USPS's reporting of delivery performance information would
be to provide some information similar to the financial information that
USPS already provides on its Web site. In the financial area, USPS has
instituted a dedicated USPS Web page that has links to its financial
reports, related reports and data, and timely disclosure of important
developments. USPS also improved the quarterly financial reports that
provide explanations for results and trends, as well as its financial
outlook.
29The PRC's Office of the Consumer Advocate represents the interests of
the general public. The written agreement with USPS is available at
http://www.prc.gov/docs/46/46232/OCA_Notice_with_Letter.pdf .
Progress In Developing Complete Delivery Performance Measurement Is
Unsatisfactory Due To Lack of Management Commitment and Effective Collaboration
USPS has made slow and inadequate progress in modernizing its delivery
standards and in implementing delivery performance measurement for all
major types of mail. USPS's limited progress has left major gaps in each
of these areas, despite numerous recommendations for improvements that
have been made in these areas over the years, including those by
USPS-mailer task forces and working groups, as well as some USPS
initiatives to develop delivery performance measurement. Without
management commitment and effective collaboration with mailers, it will be
difficult for USPS to overcome technical challenges and achieve progress
and results that are in the interest of both USPS and its customers in
today's competitive marketplace.
Key Recommendations from Collaboration Efforts Involving USPS and Mailers Have
Not Been Implemented
Some of USPS's and the mailers' collaboration efforts over the years have
resulted in successes; but key recommendations from these efforts have yet
to be realized. A broad cross section of mailer groups and mailers who met
with us shared their concerns about delivery standards and related
information; delivery performance measurement and reporting; and
implications of delivery performance information and gaps in this area.
They expressed frustration with the slow pace of USPS's progress in
improving delivery performance information. As one mailers' association
recently wrote, "We do not expect the USPS to move tomorrow to the
ultimate service performance measurement system, but the total lethargy to
take any step forward is unacceptable." Also, "the Postal Service's lack
of clockwork-like predictability is the number one reason for repeated
industry calls for standards and measurements."
Many recommendations for improving performance information were made by
committees that comprised USPS and mailers, as noted in table 5 below.
Some notable examples include the 1992 Competitive Services Task Force,
the 1997 Blue Ribbon Committee, and the 1999 follow-up effort by a
USPS-mailer working group. We asked USPS what actions, if any, it had
taken on the 1999 recommendations, but we did not receive a response.
Table 5: Timeline of Actions and Recommendations Related to Delivery
Performance Measurement
Source: GAO analysis of USPS information and other sources, such as
reports of the above committees.
Impediments Remain to Implementing Performance Measurement for all Major Types
of Mail
Multiple impediments have contributed to USPS's slow progress toward
implementing delivery performance measurement for all major types of mail.
The most important impediment is the lack of management commitment and
effective collaboration with the mailing industry to follow up on
recommendations for improvements and to resolve issues between USPS and
mailers. Additional impediments include technological limitations, limited
mailer participation in providing information needed to facilitate
performance measurement, data quality deficiencies, and costs.
Lack of Management Commitment and Effective Collaboration
USPS has not provided management commitment and effectively collaborated
with mailers to develop delivery performance measures for all major types
of mail. To achieve effective collaboration, it is necessary to build
consensus among diverse mailers with different information needs, as well
as between mailers and USPS. Such a challenge requires leadership and an
effective process for follow up, particularly given the complexity of
measurement issues and the time frame that likely will be required to
overcome longstanding issues. Based on our discussions with mailers and
postal officials, some of the commitment and collaboration challenges have
included:
o USPS has lacked commitment to implementing delivery performance
measurement and reporting for all major types of mail;
particularly, as some mailers told us, USPS has tended to resist
greater transparency, oversight, and accountability. A USPS senior
vice president told us that USPS had no plans for implementing
additional measures of delivery performance. A second USPS senior
vice president explained that although some pieces of mail may be
tracked as automated equipment reads barcodes on the mail,
enabling more information for management and diagnostic purposes,
these pieces are unrepresentative, and USPS has no plans for using
mail tracking data to develop representative measures of delivery
performance. As for major types of mail that are not measured,
USPS has publicly reported that it has no system in place for
measuring service performance for Standard Mail on a systemwide
basis and currently has no plans for the development of such a
system.30 Similarly, USPS officials told us that it has no plans
to develop representative measures of delivery performance for
bulk First-Class Mail, which, after Standard Mail, is the
second-largest volume of mail that is not measured.
Further, USPS stated in its Strategic Transformation Plan that it
would be prepared to extend performance measurement and reporting
to additional mail classes as it achieves high levels of delivery
service performance. A USPS vice president told us that USPS
agreed in 2005 to begin reporting delivery performance results on
its Web site for Express Mail and Priority Mail because USPS had
already improved delivery performance for these types of mail to
high levels, and therefore the results could help USPS promote
these types of mail. This statement contrasts with a general
performance principle that a major use, if not the major use, of
regularly collected outcome information should be by program
managers themselves to improve the effectiveness of their
programs.31 As we have reported, the benefit of collecting
performance information is only fully realized when this
information is actually used by managers to make decisions
oriented toward improving results.32
o Although many groups have issued recommendations to USPS,
follow-through on key recommendations did not occur. USPS often
did not officially respond to the recommendations at the time they
were made and did not implement the recommendations, so it was not
clear whether USPS agreed or intended to implement the
recommendations. Moreover, once a group completed its report with
recommendations to USPS, it disbanded, which limited the
continuity that otherwise could have been helpful for follow-up.
o Effective collaboration has been impeded by USPS's resistance
to sharing some diagnostic data it collected with mailers. In
general, USPS has maintained that delivery performance data below
the national level are proprietary, such as data on performance
related to any particular mail processing facility or
transportation segment. Therefore, according to USPS, it should
not be required to publicly disclose these data in PRC proceedings
in response to requests by any interested party. However,
voluntarily sharing diagnostic delivery performance information
with mailers experiencing delivery problems could be useful for
both USPS and mailers to collaboratively develop an understanding
of whether the problems are limited to particular mailings or are
systemic-resulting from specific USPS operational problems. Such
an understanding can help in identifying the cause of delivery
problems and in implementing corrective action. Although USPS
representatives may communicate with mailers about these problems,
the mailers told us they often lack sufficient timely and
actionable data on delivery problems. They have called for USPS to
share more aggregate delivery performance information.
The absence of management commitment and effective collaboration
matters for the future because give-and-take by both USPS and
mailers will be required to achieve consensus on designing
measurement systems that meet different information needs, finding
ways to cover the associated USPS costs, increasing mailer
participation in providing information needed to facilitate
performance measurement, and overcoming remaining impediments to
implementing valid measurement systems. In this regard, we are
encouraged that USPS has engaged in collaborative efforts to
improve performance measurement for Parcel Select, starting with
the Deputy Postmaster General reaching out to the Parcel Shippers
Association (PSA), which represents major Parcel Select mailers,
and offering to engage in collaborative efforts. The Deputy
Postmaster General assigned responsibility to a single manager for
follow-up. USPS followed through by reaching consensus on
standards, performance measurement, and the sharing of aggregate
data, which required actions by both USPS and mailers to
successfully implement. According to PSA officials, the standards,
measures, and performance incentives have led to a marked
improvement in delivery performance for Parcel Select; and, as a
result, USPS has been able to maintain its viability within the
competitive package services market. The USPS official with
responsibility in this area made similar comments. In addition,
USPS recently proposed requiring mailers to barcode some Parcel
Select items; if this increases barcoding, it will facilitate
delivery performance measurement. USPS's Parcel Select provides a
successful model for updating the delivery standards for other
types of mail, implementing delivery performance measurement, and
holding USPS accountable for results.
Similarly, USPS worked with other stakeholders to implement
delivery performance measurement for Global Express Mail, which is
managed by an international organization called the Express Mail
Service (EMS) Cooperative.33 Timely delivery of EMS items,
including Global Express Mail, has reportedly improved since
delivery standards and measurement were implemented.
Other Impediments for Measuring Delivery Performance
Several other impediments have limited the development of delivery
performance measures for all major types of mail. Two key
impediments involve limitations in technology, which limited
USPS's ability to track mail from entry to delivery; and limited
mailer participation in providing information needed to facilitate
performance measurements, which limited the representativeness of
the performance data collected. In addition, data quality
deficiencies and cost concerns have impeded progress.
Technological limitations. USPS has not fully implemented
technology that will enable it to track barcoded mail through its
mail processing and transportation networks that could play a part
in measuring performance when completed. Although some
implementation, such as upgrading barcodes for individual mail
pieces and mail containers, is under way, full implementation will
take years. According to the Deputy Postmaster General, USPS
expects to make substantial progress in resolving these
technological limitations over the next 5 years. For example, near
the end of this decade, USPS is planning to install new automated
equipment to sort flat-sized mail, such as large envelopes and
catalogs, into the order it is delivered, which promises to
greatly expand the automatic scanning of barcodes on mail pieces.
More generally, USPS officials said that USPS is working toward
tracking mailings from acceptance (which they said will depend on
mailers providing accurate data) through USPS's mail processing
and transportation networks. Such information is a step toward
additional delivery performance measurement. In the interim,
however, major gaps remain in USPS's ability to track most types
of mail.
Limited mailer participation. Mailer participation is low in
applying unique barcodes to mail pieces for tracking purposes,
which means that the tracking data cannot be considered
representative of overall performance. Using USPS's Confirm
Service, mailers can apply unique barcodes to Standard Mail,
First-Class Mail, and Periodicals, when the mail is letter or
flat-sized and can be sorted on USPS automation equipment.
Although these types of mail constitute most of the total mail
volume, less than 2 percent of total mail volume is tracked by the
Confirm program. Participation in Confirm is limited, in part
because its use is voluntary, mailers must pay a fee to
participate, and mailers also incur additional expenses related to
their participation, such as for mail preparation. Although USPS
officials expect mailer participation to increase as improved
technology is implemented, they expect participation to continue
to be unrepresentative, with some mailers more likely to
participate than others. They explained that Confirm will continue
to be of greatest interest to large mailers with well-developed
capabilities to use tracking data. These mailers include large
companies that track bills and remittance mail and large
advertisers that track mailed catalogs in order to efficiently
schedule staff and inventory.
Another factor in low participation is the mailers' continuing use
of non-USPS delivery performance measurements that they have
established or paid third parties to do so, such as "seeding"
their mailings with mail sent to persons who report when it is
received.34 As long as a nonrandom group of mailers participates
in Confirm-which is likely to be the case for the foreseeable
future-the aggregate results will not be representative as a
measure of overall systemwide performance. Thus, the main options
for obtaining representative results for any given type of mail
(such as bulk First-Class Mail) would appear to be (1) obtaining
sufficient participation by all mailers who send that type of mail
or (2) obtaining information on mail that is sent by a
representative sample of mailers. For either option, USPS, mailer
groups, and mailers would need to collaborate to achieve the level
of mailer participation necessary to generate representative
performance data that could be useful to all parties.
Data quality. According to USPS, data quality deficiencies have
been another problem in measuring delivery performance, because
USPS has no way to determine when it receives bulk mail, such as
Standard Mail and Periodicals, which is commonly referred to as
obtaining a valid "start the clock" time. At present, USPS relies
on mailer-provided information submitted with each mailing, which
USPS officials told us does not always include accurate
information on when and where the mail was submitted. Based on
their experience, USPS officials do not consider mailer-provided
information to be sufficiently accurate for measuring delivery
performance.
The issue of inaccurate data has persisted for years despite
repeated efforts by working groups composed of USPS and mailer
representatives. In this regard, USPS officials told us that
resolving this issue would likely entail additional costs for
mailers, which they said mailers have not been willing to pay;
however, some mailers disagree with this view. On the positive
side, the USPS Senior Vice President for Intelligent Mail and
Address Quality told us that USPS has initiatives under way that
should help ameliorate data quality deficiencies.
Costs. Senior USPS officials told us that currently, it would be
too costly for USPS to create new representative performance
measures for any major type of mail. They said that given current
technology, USPS would incur substantial costs to implement
delivery performance measurement for all major types of mail if
USPS were to use bar codes to track every mail piece from when it
enters the postal system to when it is delivered. A senior USPS
official told us that delivery performance measurement for all
mail-which would have involved tracking more than 210 billion
pieces of mail in fiscal year 2005-would cost hundreds of millions
of dollars and expressed doubt that mailers would want to pay
those additional costs even in return for performance data. In
this regard, sampling approaches could be used to obtain
representative data on delivery performance that would likely be
much less costly than seeking to measure delivery performance for
every piece of mail.
A related cost issue is how USPS would recover the associated
measurement costs from mailers and the impact of this decision on
mailer participation that would be needed for USPS to measure
delivery performance. As the Confirm program illustrates, a
fee-based program creates a disincentive for mailers to
participate. In contrast, USPS chose to build its tracking costs
into the rate base for Parcel Select, so that the costs would be
shared by all Parcel Select mailers. USPS officials told us they
had rejected this approach for other types of mail for several
reasons, including the uncertain benefits to USPS and mailers'
preference for lower rates, particularly for mailers who would not
wish to pay the costs associated with collecting delivery
performance data.
However, some major mailer groups disagree with USPS's
perspectives of mailer willingness to cover costs as a key
impediment to implementing representative measures of delivery
performance for all major types of mail. The Mailers Council, a
coalition of over 50 major mailing associations, corporations, and
nonprofit organizations, told us that its members would be willing
to pay additional USPS costs, within reason, for delivery
performance measurement, stating that such costs would be small
compared to total postal costs. Until USPS commits to developing
additional representative measures of delivery performance for all
major types of mail and considers various approaches for measuring
the delivery performance of its major types of mail, discusses
their usefulness and feasibility with mailers, and estimates the
associated costs, it will be difficult to get beyond USPS's
assertion that measurement is cost-prohibitive and mailers'
assertions that the costs could be relatively low and that they
would be willing to bear them.
USPS Plans to Improve Service Performance, But Not to Implement
Representative Measures of Delivery Performance Across All Product Lines
Although USPS plans to improve its service performance, it has no
current plans to implement additional representative measures of
delivery performance. USPS states in its latest Strategic
Transformation Plan that it plans to improve the quality of postal
services by continuing to focus on the end-to-end service
performance of all mail. Further, it states that "customers expect
timely, reliable mail service, and the Postal Service has
delivered. Under the 2002 Transformation Plan, the Postal Service
successfully improved service performance across all product
lines." We acknowledge and agree with USPS's emphasis on improved
service performance. However, we do not know whether service has
improved across all product lines, nor does USPS, because as we
noted earlier, USPS does not collect or provide representative
delivery performance information that would be needed to support
this statement. USPS has information from various operational data
systems, but this information does not amount to delivery
performance measurement. Gaps in delivery performance measurement
information are hindering USPS and mailers in identifying
opportunities to improve service across all product lines, as well
as effectively addressing these opportunities by understanding
whether problems are specific to a particular mailer or systemic
problems in USPS's mail processing and transportation networks.
Without complete delivery performance information that is
regularly reported, stakeholders must rely on the publicly
available information that USPS chooses to provide, which often
highlights only positive results. For example, in discussing its
strategy for providing timely, reliable end-to-end delivery
service, the Strategic Transformation Plan states "customer
satisfaction scores have never been higher." Although customer
satisfaction information is valuable and useful to USPS and other
organizations that provide products and services, it does not
measure delivery performance.
USPS's currently available delivery performance information does
not provide sufficient context to determine (1) actual delivery
performance results for all of its product lines, (2) how
performance is changing over time through the assessment of trend
information, and (3) whether USPS's delivery performance is
competitive. Timeliness is a critical factor in today's
competitive business environment, where many companies operate
with just-in-time inventories and rely on timely delivery to meet
their needs. It is likely to become even more important in the
future. Thus, reliable delivery performance information reported
in a timely manner is critical for high-performing organizations
to be successful in this environment. USPS's Strategic
Transformation Plan discusses strategies for providing timely,
reliable mail delivery, which include plans to improve the
quantity and accuracy of service performance information collected
through passive scanning and improved start-the-clock information,
provide customers with information about their own mailings, and
create better diagnostic data so that bottlenecks can be
eliminated throughout the system. These are all positive steps
needed to improve delivery performance information. However, the
Plan falls short of committing to developing end-to-end delivery
performance information that could be used to measure how well
USPS is achieving its strategy of improving service performance
across all product lines. Further, the Plan does not discuss what
delivery performance information USPS plans to report publicly.
Pending legislation does address what delivery performance
information Congress would like to see USPS report in the future.
However, USPS could demonstrate that it wants to provide
leadership in this area by not waiting for the legislation to be
enacted. Instead, USPS could clearly commit to developing
representative end-to-end delivery performance measures for all of
its product lines. USPS could also take the lead in collaborating
with mailers to implement such performance measures. As we
previously stated, effective collaboration with mailers is needed
to resolve the impediments that hinder progress in this area, such
as data quality issues involving how to improve the accuracy of
start-the-clock information. Concerns about cost could be
addressed by exploring options such as sampling in collaboration
with the mailers to determine how best to measure delivery
performance at much less cost than attempting to track every mail
piece. Such collaboration would also allow the parties to
determine their information needs, explore cost trade-offs
associated with various options, and resolve associated data
quality issues. In its letter to us, PostCom noted that delivery
performance measurement could be implemented in many ways that
would not be costly. PostCom said that measurement costs could be
affected by multiple factors, such as whether all mail pieces or a
sample are tracked; whether tracking is to the point of delivery
vs. the last automated scan plus a "predicted" time for delivery;
whether data is collected automatically by equipment in a passive
scan vs. other methods requiring USPS employees to scan mail; and
whether USPS technology developments will be used exclusively to
measure performance or primarily for processing the mail.
We recognize that it will take time to resolve impediments to
implement additional delivery performance measures. However,
USPS's leadership, commitment, and effective collaboration with
mailers are critical elements to implementing a complete set of
delivery performance measures that will enable USPS and its
customers to understand the quality of delivery services, identify
opportunities for improvement, and track progress in achieving
timely delivery.
Conclusions
USPS delivery standards are not as useful and transparent as they
should be. Standards for key types of mail-including Standard
Mail, USPS's main growth product-are largely static, and do not
fully reflect current operations. Thus, they cannot be used to set
realistic expectations for mail delivery, to establish benchmarks
for measuring performance, or to hold individuals accountable
through pay-for-performance incentives tied to measurable results.
USPS's delivery performance measurement and reporting is not
complete, because it does not cover key types of mail-including
Standard Mail, bulk First-Class Mail, Periodicals, and most
Package Services. Further, despite recent disclosures on its Web
site for some types of mail, USPS's reporting remains limited and
has fallen short of statutory requirements to include specified
delivery performance information. Because of gaps in delivery
performance measurement and reporting, stakeholders, including the
Congress, cannot understand how well USPS is fulfilling its basic
mission, nor can they understand delivery performance results and
trends. As a result, USPS and mailers are hindered in identifying
and diagnosing delivery problems so that corrective action can be
implemented. This situation increases the financial risk to USPS,
which faces increasing competition. If mailers are not satisfied
with USPS's delivery service, they could take their business
elsewhere.
Prospects for progress continue to be uncertain, in part because
USPS has not committed itself to modernizing its delivery
standards or developing representative performance measures for
all major types of mail. USPS management commitment and more
effective collaboration with mailers will be critical for
resolving impediments to delivery performance measurement and
reporting. Give-and-take by both parties will be required to
achieve consensus on designing measurement systems that meet
different information needs, increasing mailer participation in
providing information needed to facilitate performance
measurement, addressing data deficiencies, finding ways to cover
the associated costs, and overcoming impediments.
Recommendations for Executive Action
To facilitate greater progress in developing complete delivery
performance information, we recommend that the Postmaster General
take the following four actions:
1. modernize delivery standards for all major types of mail so that they reflect USPS operations and can be used as benchmarks for understanding and measuring delivery performance;
2. provide a clear commitment in USPS�s Comprehensive Statement
on Postal Operations to develop a complete set of delivery
performance measures for each major type of mail that is
representative of overall delivery performance;
3. implement representative delivery performance measures for all
major types of mail by providing more effective collaboration with
mailers and others to ensure effective working relationships,
follow-through, accountability, and results; and
4. improve the transparency of delivery performance standards,
measures, and results by publicly disclosing more information,
including in its Comprehensive Statement on Postal Operations and
other annual performance reports to Congress, as well as providing
easily accessible information on its Web site.
Agency Comments and Our Evaluation
USPS provided comments on a draft of this report in a letter from
the Postmaster General dated July 14, 2006. These comments are
summarized below and included as appendix III. In addition, the
Postmaster General provided oral comments in a meeting on June 26,
2006, with suggestions for further clarifying information, which
were incorporated where appropriate.
USPS's letter recognized that its delivery performance measurement
and reporting are not complete and provided detailed information
about its ongoing and planned efforts to ultimately measure
service performance and provide transparency for all classes of
mail. USPS stated that it intends to lead the efforts required to
reach this goal by working collaboratively with others in the
mailing industry. USPS's letter further stated that ultimately,
"the core issue is service-and according to all indicators, we are
succeeding in our goal of continuous service improvement. We are
not satisfied with maintaining the status quo." USPS stated that
although it recognizes the desire for aggregate service
performance results for all mail categories, it believes that it
serves mailers best by focusing first on providing service
measurement and diagnostics to individual customers, then looking
to provide aggregate results. Regarding the draft report's
findings related to service standards, USPS disagreed that some of
its delivery standards are outdated and stated that its service
standards are modern and up-to-date. USPS did not directly comment
on three of our four recommendations. On our fourth recommendation
concerning improving the transparency of delivery performance
standards, measures, and results, USPS commented that its service
standards should be more visible and stated that it is exploring
making information related to its service standards available
through additional channels, including its Web site.
We are encouraged by USPS's commitment to ultimately measure
service performance and provide transparency for all classes of
mail and its intention to take the lead in working with mailers to
achieve this goal. Further, we recognize in our report USPS's
ongoing efforts to implement technology that will track mail
throughout USPS's mail processing system, which is a step toward
improved delivery performance measurement. We also agree, as we
noted in our report, that mailer participation is necessary to
generate representative delivery performance measures for all mail
categories. USPS's letter details many ongoing and planned efforts
necessary to improve performance measurement, as well as specific
actions that USPS calls on mailers to take to enable its vision of
measurement. We agree with USPS's emphasis on improving service,
but we continue to have questions about whether USPS's efforts
will result in representative delivery performance measures for
all major types of mail. For most major types of mail, USPS's
vision of service performance measurement is generally limited to
tracking mail through its mail processing and transportation
networks, which is not the same as measuring end-to-end delivery
performance against USPS delivery standards. Considering USPS's
lack of commitment to implementing a complete set of delivery
performance measures, as well as the lack of timeframes in USPS's
letter, we also have questions about how long it will take to
achieve this goal. We recognize that it will take time to
implement many of the ongoing and planned initiatives described in
USPS's letter. Thus, USPS's sustained leadership is critical to
ensure that effective collaboration with mailers takes place so
that USPS implements and reports on representative delivery
performance measures for all major types of mail. We also believe
that USPS should establish specific timeframes so that timely
progress can be made in this area.
USPS's letter states that it will first provide individual mailers
with delivery information before working to provide aggregate
delivery performance information, stating that aggregate
information on average performance may be irrelevant to mailers.
We do not believe that these are mutually exclusive goals that
have to be addressed sequentially, because both aggregate and
individual performance information have benefits that would meet
varying needs of different postal stakeholders. We recognize and
agree that mailers want to have performance information related to
their own mailings to determine the status of their mail as it
moves through USPS's system. However, appropriate aggregate
information is needed to put mailer-specific information into
context so that USPS and mailers can understand whether any
delivery problems that occur are specific to particular mailers or
reflect systemic issues within USPS's processing and
transportation networks. Appropriate aggregate information may
need to be more specific than the average performance for a
general type of mail, so that comparisons can take geographic and
other variations in performance into account and thereby provide
useful diagnostic information to USPS and mailers. USPS has
recognized this principle in its EXFC measure of First-Class Mail
deposited into collection boxes, which provides aggregate data
that can be broken down by geographic area, delivery standard
(e.g., results for 1-day, 2-day, and 3-day mail), and other
subgroups of this mail. Moreover, USPS's diagnostic data is not
representative and does not amount to delivery performance
measurement. USPS's letter does not fully recognize the critical
importance of aggregate delivery performance measurement for
accountability purposes, by parties both inside and outside USPS.
As USPS's letter demonstrates, where USPS has delivery performance
measures, it can report on how well it is achieving one of its
primary goals to improve delivery services. However, USPS is not
in a position to make such assessments for more than four-fifths
of its mail volume, because it does not measure and report its
delivery performance for most types of mail.
USPS's letter also states that "we share the mutual goal of
complete network transparency to provide mailers with a
comprehensive view of the service they receive." Our view of
transparency is broader than providing mailers with data on their
own mail. As a federal government entity with a monopoly on some
delivery services, USPS is accountable to the American public,
Congress, PRC, USPS's Board of Governors, and postal customers for
the delivery services it provides. However, as noted earlier,
stakeholders cannot understand how well USPS is fulfilling its
basic mission due to gaps in delivery performance measurement and
reporting, nor can they understand delivery performance results
and trends. USPS's letter does not address what actions USPS plans
to take to improve the transparency of publicly available delivery
performance information. Without sufficient transparency,
oversight and accountability are limited.
We disagree with USPS's comments that its service standards are
modern and up-to-date. Consistent with the input we received from
numerous mailers, we believe that these standards do not work for
the mailers and for USPS. As we noted in our report, some of
USPS's delivery standards, including those for Standard Mail, some
Periodicals and most Package Services, do not reflect changes in
how mail is prepared and delivered. These standards are unsuitable
as benchmarks for setting realistic expectations for timely mail
delivery, for measuring delivery performance, or improving
service, oversight, and accountability.
Specific comments in the USPS letter were organized into the
following six sections: (1) "Focus on Service," (2) "Service
Performance Results," (3) "Some Areas of Concern," (4) "Modern
Service Standards," (5) "Measurement Systems and Diagnostic
Tools," and (6) "Customer Collaboration and Reporting." These
comments are summarized below with our analysis.
Focus on Service: USPS commented that one of its primary goals in
its Strategic Transformation Plan 2006-2010, is to improve
service. USPS said this goal is supported by strategies that
include a "balanced scorecard" that uses service performance
metrics to support personal and unit accountability. Goals for
these metrics, which include delivery performance measures as well
as operational indicators that USPS said are critical to on-time
service performance, are incorporated into USPS's
pay-for-performance incentives for its managers. We agree with
USPS's focus on improving service and holding its managers
accountable for results. Our draft report noted that USPS had
recognized the importance of the timely delivery of mail and
integrated performance targets and results for some types of mail
into its performance management system. However, USPS has not yet
achieved its aim of a "balanced scorecard" for delivery
performance because its delivery performance measures cover less
than one-fifth of mail volume, and these measures do not cover
Standard Mail, bulk First-Class Mail, Periodicals, and most
Package Services mail. This gap impedes USPS's potential for
holding its managers accountable for delivery performance of all
types of mail and for balancing increasing financial pressures
with the need to maintain quality delivery service.
Service Performance Results: USPS stated that its focus on service
has resulted in "record performance across all mail categories,"
adding that its measurement systems for First-Class Mail, Priority
Mail, and Express Mail show that USPS had met or exceeded the
performance targets it set for them. However, we do not know
whether service has improved across all mail categories, nor does
USPS, because as we noted earlier, USPS does not collect or
provide representative delivery performance information that would
be needed to support this statement. Further, in fiscal year 2005,
USPS did not achieve record delivery performance for all
categories of mail that it measured, and did not meet all of the
delivery performance targets it had set. For example, the 2005
Annual Performance Report included within the 2005 Statement on
Comprehensive Operations reported that on-time performance for
First-Class Mail with a 3-day delivery standard, as measured by
EXFC, was 87 percent in fiscal year 2005, down 2 percentage points
from the previous fiscal year and falling short of USPS's goal of
90 percent. On-time delivery scores for Priority Mail also
declined over the same period.
With respect to reporting on its delivery performance, USPS
commented in its letter that it has posted delivery performance
results on its Web site, including for some of its competitive
products. As our draft report stated, USPS improved its reporting
of delivery performance results by starting to post information on
its Web site in April 2006, including selected results for the
past quarter for the timely delivery of some Express Mail,
Priority Mail, First-Class Mail, and Package Services. We stated
that USPS's recent disclosures are a good step toward providing
easily accessible information on delivery performance results on
its Web site for key types of mail used by the public. However, we
also found that the information is incomplete because it does not
include delivery performance results for all major types of mail.
Some major types of mail are not measured, while the information
on the Web site provided limited information for mail that is
measured, and did not fully disclose the limited scope of this
measurement. We continue to believe that without more complete
reporting of delivery performance information, Congress and the
American public do not have adequate information to determine how
well USPS is accomplishing its mission of providing prompt and
reliable delivery services.
Some Areas of Concern: USPS stated that our draft report did not
fully consider some important issues related to performance
measurement. USPS commented that although our draft report did
discuss data quality issues, it had not accounted for some
relevant factors, including the completeness, accuracy, and
validity of mailer information submitted when mail is entered.
However, our draft report included a discussion of the major
impediments that have contributed to USPS's slow progress toward
implementing delivery performance measures for all major types of
mail, including impediments relating to the quality of mailer
information submitted when mail is accepted into USPS's system,
which is needed for "start the clock" delivery information. Our
draft report provided USPS's view that mailers do not provide
accurate information on its mailings that would be needed to
"start the clock" for delivery performance measurement and noted
that this issue has been persistent despite repeated efforts by
USPS-mailer committees. In discussing measurement issues, USPS
further commented that the mailing industry must embrace changes
such as improved address quality and increased presort accuracy.
We believe that although these outcomes would facilitate USPS
handing of mail, this should not be a reason to delay measurement
of delivery performance. Other federal entities routinely set
performance goals and measure results for important activities
that are partly outside their control, and use the results to work
with their partners to improve their performance.
On another matter, USPS stated that our report's discussion of
USPS attempts to measure performance did not account for
complexities unique to Standard Mail and Periodicals. USPS also
stated that its experience has demonstrated that it is
particularly difficult to design a broad and effective measurement
system for Standard Mail and Periodicals, explaining that its
previous attempts were unsuccessful for reasons including lack of
information on the acceptance of this mail into USPS's system and
complexities relating to different types of mail preparation and
entry. We disagree that our draft report did not adequately
account for these complexities and believe USPS can address these
complexities to successfully implement delivery performance
measures for Standard Mail and Periodicals. As noted above, our
draft report discussed issues in obtaining information needed to
"start the clock" on delivery performance measurement. We also
recognized that Standard Mail and Periodicals have complexities in
mail preparation and entry that USPS should incorporate into its
delivery performance standards so that they can serve as suitable
benchmarks for measurement. Further, our draft report provided a
detailed discussion of attempts to measure performance by task
forces and working groups comprised of USPS and mailer
representatives, who were well versed in the complexities of
Standard Mail and Periodicals. These groups repeatedly recommended
that USPS measure the delivery performance of Standard Mail and
Periodicals, including the 1997 recommendations of the Blue Ribbon
Panel and the 1999 recommendations of a follow-up USPS/mailer
working group that were made years after USPS's short-lived
attempt to measure delivery performance of Standard Mail and
Periodicals. The 1999 recommendations stated that USPS should
implement performance measurement for Standard Mail, Periodicals,
and other classes of mail in a manner that would provide aggregate
performance data with breakdowns according to delivery standards,
which for bulk mail such as Standard Mail and Periodicals would
reflect how the mail is prepared and the type of postal facility
where it enters USPS's system. The working group asked USPS to
begin working on implementing these recommendations immediately.
As we concluded, gaps in performance measurement mean that
stakeholders cannot understand how well USPS is fulfilling its
basic mission, nor can they understand results and trends-a
situation that also increases the financial risk to USPS, which
faces increasing competition.
Modern Service Standards: USPS stated that our draft report did
not fully acknowledge its long history of establishing and
revising delivery standards. We disagree because our report
provides a detailed history of delivery standards, noting that
USPS has updated its standards for some mail, such as First-Class
Mail and Parcel Select. Our draft report also stated that delivery
standards are outdated for several types of mail, including
Standard Mail, some Periodicals, and most Package Services,
because they have not been updated in many years to reflect
significant changes in the way mail is prepared and delivered. In
addition, USPS commented that the concept of modernized delivery
standards may, for some, denote upgrading service levels, warning
that upgrading service would result in increased costs and prices.
However, our draft report does not discuss whether service needs
to be upgraded and focuses instead on the need for USPS delivery
standards to reflect current USPS operations including presorting
and destination entry.
Measurement Systems and Diagnostic Tools: USPS commented that the
description of USPS performance measurement systems in our draft
report was incomplete and unintentionally misleading. USPS
commented that the draft report overlooked "the fact" that EXFC,
which measures First-Class Mail deposited into collection boxes,
is reflective of delivery performance for all First-Class Mail
including bulk First-Class Mail. USPS stated that bulk First-Class
Mail is handled in the same manner as collection box mail. USPS's
comment about EXFC is contradicted by years of USPS reporting,
including in its annual Comprehensive Statement on Postal
Operations and its quarterly press releases, that "EXFC is not a
systemwide measure of all First-Class Mail performance." USPS has
repeatedly used this statement in response to a recommendation
made in a report issued in 2000 by the USPS Office of Inspector
General, which also found that EXFC does not consider the delivery
performance of bulk First-Class Mail.35
Customer Collaboration and Reporting: USPS commented that many of
its service measurement systems and diagnostic tools were designed
jointly or in collaboration with its customers. Our draft report
discusses USPS's many collaborative efforts with mailers, but, as
noted previously, our concern is that USPS has not implemented key
recommendations that have been made since the early 1990s by
numerous USPS/mailer committees. Further, our work found that the
lack of adequate and continued management commitment and effective
collaboration with the mailing industry to follow through on
recommendations for improvements and to resolve issues is an
overall theme in understanding the slow progress being made in
developing and implementing methods of measuring delivery
performance. Thus, while we are encouraged that USPS presented
several initiatives to develop the ability to track mail through
its mail processing and transportation networks, as outlined in
our report and our analysis of USPS's comment letter, we continue
to believe that there needs to be greater progress in implementing
representative measures of end-to-end delivery performance.
We are sending copies of this report to the Ranking Minority
Member of the Senate Committee on Homeland Security and
Governmental Affairs, the Chairman and Ranking Minority Member of
the House Committee on Government Reform, Rep. John M. McHugh,
Rep. Danny K. Davis, the Chairman of the USPS Board of Governors,
the Postmaster General, the Chairman of the Postal Rate
Commission, the USPS Inspector General, and other interested
parties. We also will provide copies to others on request. In
addition, the report will be available at no charge on the GAO Web
site at http://www.gao.gov.
If you or your staff have any questions regarding this report,
please contact me at [email protected] or by telephone at (202)
512-2834. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. GAO staff who made key contributions to this report are
listed in appendix IV.
Katherine A. Siggerud Director, Physical Infrastructure Issues
Appendix I: Objectives, Scope, and Methodology
Our objectives were to assess (1) the delivery standards for the
timely delivery of mail that the U.S. Postal Service (USPS) has
established, (2) the delivery performance information on the
timely delivery of mail that USPS measures and reports, and (3)
the progress USPS has made in improving its delivery performance
information.
We based our assessment of USPS's delivery standards, measures,
and reporting using the concepts of completeness, transparency,
and usefulness of delivery standards, measures, and reporting (see
table 6). We identified applicable laws related to USPS's mission,
ratemaking, and reporting; statutes and practices used by
high-performing organizations related to delivery standards,
measurement, and reporting, including practices identified through
our past work. The basis of our assessment is described in greater
detail in table 6.
Table 6: Basis for GAO Assessment of USPS Delivery Standards, Measurement,
and Reporting
Source: Criteria developed by GAO based on laws, practices used by
high-performing organizations, and past GAO work.
a39 U.S.C. S:101(a).
b39 U.S.C. S:101(b).
c39 U.S.C. S:101(f).
d39 U.S.C. S:101(e).
e39 U.S.C. S:101(f).
f39 U.S.C. S:403(b)(2).
gTypes of domestic mail are established in the Domestic Mail
Classification Schedule, which is incorporated into the PRC subpart of the
Code of Federal Regulations (Appendix A to Subpart C of 39 C.F.R. Part
3001, following 39 C.F.R. S:3001.68). Statutory guidance for domestic mail
classification is specified in 39 U.S.C. S:3623.
hGAO, Major Management Challenges and Program Risks: U.S. Postal Service,
GAO-01-262 (Washington, D.C.: Jan. 2001).
iGAO, The Results Act: Observations on the Postal Service's Preliminary
Annual Performance Plan, GAO/GGD-98-144 (Washington, D.C.: July 10, 1998).
jGAO, Tax Administration: IRS Needs to Further Refine Its Tax Filing
Season Performance Measures, GAO-03-143 (Washington, D.C.: Nov. 22, 2002).
kAPQC, Achieving Organizational Excellence Through the Performance
Measurement System: Consortium Benchmarking Study: Best Practice Report
(Houston, Texas: 1999).
l39 U.S.C. S:2401(e).
m39 U.S.C. S:2803-2804.
n39 U.S.C. S:2803(d).
oLaws restricting private delivery of letters include 39 U.S.C. S:601-606
and 18 U.S.C. S:1693-1699.
pGAO, U.S. Postal Service: Key Elements of Comprehensive Postal Reform,
GAO-04-397T (Washington, D.C.: Jan. 28, 2004), U.S. Postal Service: Bold
Action Needed to Continue Progress on Postal Transformation, GAO-04-108T
(Washington, D.C.: Nov. 5, 2003); Major Management Challenges and Program
Risks: U.S. Postal Service, GAO-03-118 (Washington, D.C.: Jan. 2003).
q GAO-03-118 .
rGAO, Results-Oriented Cultures: Implementation Steps to Assist Mergers
and Organizational Transformation, GAO-03-669 (Washington, D.C.: July 2,
2003).
s39 U.S.C. S:202(a) and S:205(a).
t39 U.S.C. S:3622(b)(2).
uPRC, Presiding Officer's Ruling No. R2000-1/51, Docket No. R2000-1
(Washington, D.C.: Apr. 26, 2000).
v39 U.S.C. S:3623.
w39 U.S.C. S:3661.
x39 U.S.C. S:3662.
yGAO, Managing for Results: Enhancing Agency Use of Performance
Information for Decision-Making, GAO-05-927 (Washington, D.C.: Sept. 9,
2005).
zNational Academy of Public Administration and IBM Endowment for the
Business of Government, How Federal Programs Use Outcome Information:
Opportunities for Federal Managers (Washington, D.C.: May 2003).
aaGAO, Results-Oriented Government: Practices That Can Help Enhance and
Sustain Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.:
Oct. 21, 2005).
bbGAO, Results-Oriented Cultures: Creating a Clear Linkage between
Individual Performance and Organizational Success, GAO-03-488 (Washington,
D.C.: Mar. 14, 2003).
ccGAO, Human Capital: Observations on Final Regulations for DOD's National
Security Personnel System, GAO-06-227T (Washington, D.C.: Nov. 17, 2005).
To address the first objective, assessing delivery standards USPS has
established, we obtained information from USPS on its delivery standards
for the timely delivery of mail. Information consisted of USPS's narrative
description of its standards; documentation of its standards included in
the Domestic Mail Manual and related policies included in the Postal
Operations Manual; and written responses provided to us by USPS. We also
obtained material on delivery standards that USPS provided in Postal Rate
Commission (PRC) proceedings and that were posted to the PRC Web site.
These proceedings included postal rate cases and "nature of service"
proceedings that considered the USPS proposals expected to have an effect
on the nature of postal services on a nationwide or substantially
nationwide basis. We reviewed publicly available material that USPS
reported on its delivery standards, which was posted on the USPS Web site,
including the section of the USPS Web site devoted to the Mailers'
Technical Advisory Committee (MTAC). Our assessment of USPS's delivery
standards was also informed by the views of mailing organizations,
mailers, PRC, and PRC's Office of the Consumer Advocate (OCA), which is
charged with representing the interests of the general public and the
views of other postal stakeholders. Some of these views were provided in
written material issued by the stakeholders, including material provided
directly to us, material provided in PRC proceedings, and articles in the
trade press. Other views were provided to us in interviews we conducted
with these organizations.
To address the second objective, delivery performance information USPS
measures and reports, we obtained documentation and related written
material on USPS's delivery performance measurement systems, which
included the External First-Class Measurement System (EXFC), the Product
Tracking System (PTS), the now-discontinued Priority End-to-End System
(PETE), and other measurement systems for international mail. We obtained
documentation on the data collection procedures and internal controls for
these systems and obtained detailed explanations of these systems in
interviews with USPS officials. In addition, we obtained publicly
available information on these systems from USPS reports, material that
USPS provided PRC in past rate cases, and published articles about these
systems. We conducted a limited data reliability assessment of EXFC, PTS,
and PETE. Our assessment was informed by obtaining the views of USPS
officials, mailing groups, mailers, and other stakeholders, both in
writing and in interviews.
To address the third objective, assessing the progress USPS has made in
improving its delivery performance information, we obtained information
from a variety of sources on the progress USPS has made and its
opportunities for improving delivery performance information. We obtained
information on the history of studies that recommended USPS improve its
delivery standards, measurement, and/or reporting. These studies included
joint USPS-mailer committees, some of which were ad hoc efforts and some
of which were sponsored by MTAC. Information on these studies included
written reports by the committees, documentation on these groups provided
to us by USPS and mailers, and interviews of USPS, mailer committees, and
mailers. More generally, we obtained the views of USPS officials, mailing
groups, mailers, and other stakeholders on USPS's progress and remaining
opportunities in this area, both in writing and in interviews.
We requested comments on a draft of this report from USPS; these are
reproduced in appendix III. We conducted our review from August 2005 to
July 2006 in accordance with generally accepted government auditing
standards.
Appendix II: USPS Delivery Standards Appendix II: USPS Delivery Standards
Table 7: USPS Delivery Standards by Class and Type of Mail
Source: USPS.
aThe number of delivery days after acceptance of the mail, which generally
does not include Sundays or holidays.
bUSPS, Direct Testimony of Pranab M. Shah on Behalf of the United States
Postal Service, USPS-T-1, PRC Docket N2006-1 (Washington, D.C.: Feb. 14,
2006). See Table 8 for more detail.
cThe Postal Operations Manual (POM) is incorporated in its entirety into
the Code of Federal Regulations, but is not available on the USPS Web
site.
dPOM 458.341d.
ePOM 458.2h.
fPOM 458.341f.
gPOM 458.341h. Also see USPS, Postal Bulletin 22110, p. 19 (Washington,
D.C.: Sept. 4, 2003), Postal Bulletin 22045, p. 18 (Washington, D.C.: Mar.
8, 2001).
hPOM 458.2b.
iPOM 458.2e.
jUSPS-T-1, PRC Docket N2006-1.
kPRC Docket No. N89-1.
lUSPS policies call for consideration of 2-day standards (as opposed to
3-day standards) in some circumstances, such as when mail flows reach
specified thresholds. For example, 2-day standards are to be considered
when a destinating mail processing facility called an Area Distribution
Center receives more than 0.5 percent of its incoming mail volume from an
originating mail processing facility.
mThe Domestic Mail Manual (DMM) 113.4,
http://pe.usps.com/text/dmm300/113.htm . (The entire DMM is incorporated
by reference into the Code of Federal Regulations.) See USPS Quick Service
Guide 110, Express Mail,
http://pe.usps.gov/cpim/ftp/manuals/qsg300/q110.pdf , for a summary.
nDMM 113.4.1.1, http://pe.usps.com/text/dmm300/113.htm , and POM 674.
oDMM 113.4.3.1, http://pe.usps.com/text/dmm300/113.htm , POM 675.
pMore detailed information is available at
http://www.usps.com/serviceperformance/dayofmailing.htm .
qPOM 126.43.
r http://www.usps.com/global/sendpackages.htm and
http://www.usps.com/global/sendmail.htm .
Table 8: USPS's Approximate Overview of the Service Standard Ranges for
Standard Mail and Periodicals (not specifically required)
Source: USPS.
Note: USPS divides the United States into eight zones. The approximate
delivery standard for Standard Mail is equal to the number of postal zones
from origin (i.e., where the mail is accepted by USPS) to destination
(i.e., where the mail is delivered), plus 2 days. The approximate delivery
standard for Periodicals that traverse at least two postal zones is equal
to the number of zones from origin to destination, minus 1 day. The
specific delivery standards are defined for each combination of origin and
destination 3-digit ZIP Codes and may differ from the approximate overview
in this table.
aUsually, ZIP Codes within the same Sectional Center Facility (SCF) are
targeted for 3 days. Depending on the size of the Intra-SCF area, all
other Non-Intra-SCF destinations are 4 days or greater.
bThis can be equal to First-Class Mail delivery standards between ZIP Code
Pairs, but is not intended to ever be faster.
Appendix III: Comments from the U.S. Postal Service Appendix III: Comments
from the U.S. Postal Service
Appendix IV: GAO Contact and Staff Acknowledgments
GAO Contact
Katherine Siggerud (202) 512-2834
Staff Acknowledgments
In addition to the individual named above, Teresa Anderson, Cynthia
Daffron, Tamera L. Dorland, Kathy Gilhooly, Brandon Haller, Kenneth E.
John, Catherine S. Kim, Karen O'Conor, Jacqueline M. Nowicki, and Edda
Emmanuelli-Perez made key contributions to this report.
(542071)
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30USPS response to ValPak interrogatory in Evolutionary Network
Development Service Changes proceeding, USPS-T1-15, PRC Docket No.
N2006-1, filed Apr. 25, 2006.
31National Academy of Public Administration, How Federal Programs Use
Outcome Information: Opportunities for Federal Mangers (Washington, D.C.:
May 2003).
32 GAO-05-927 .
33The EMS Cooperative has more than 130 members, including USPS and
foreign postal administrations.
34For example, Red Tag News Publications Association, a nonprofit
association of 64 magazines and other publications that generate about
830,000 pieces of Periodicals mail annually, has 1,000 monitors who
receive magazines and who report when they arrive.
35USPS Office of the Inspector General, External First-Class Measurement
System, report number DS-AR-00-001 (Arlington, VA: Mar. 27, 2000).
www.gao.gov/cgi-bin/getrpt? GAO-06-733 .
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Katherine Siggerud at (202) 512-2834 or
[email protected].
Highlights of GAO-06-733 , a report to Congressional requesters
July 2006
U.S. POSTAL SERVICE
Delivery Performance Standards, Measurement, and Reporting Need
Improvement
U.S. Postal Service (USPS) delivery performance standards and results,
which are central to its mission of providing universal postal service,
have been a long-standing concern for mailers and Congress. Standards are
essential to set realistic expectations for delivery performance and
organize activities accordingly. Timely and reliable reporting of results
is essential for management, over-sight, and accountability purposes. GAO
was asked to assess (1) USPS's delivery performance standards for timely
mail delivery, (2) delivery performance information that USPS collects and
reports on timely mail delivery, and (3) progress made to improve delivery
performance information.
What GAO Recommends
GAO recommends that USPS take actions to modernize its delivery standards,
implement delivery performance measures for major types of mail by
providing clear commitment and more effective collaboration, and improve
the transparency of delivery performance standards, measures, and results.
In commenting on a draft of this report, USPS disagreed that its standards
are outdated and detailed its vision to improve service measures and
transparency. USPS did not directly comment on three of our four
recommendations. On our transparency recommendation, USPS said that its
standards should be more visible and is exploring providing more of this
information.
USPS has delivery standards for its major types of mail, but some have not
been updated in a number of years to reflect changes in how mail is
prepared and delivered. These outdated standards are unsuitable as
benchmarks for setting realistic expectations for timely mail delivery,
measuring delivery performance, or improving service, oversight, and
accountability. USPS plans corrective action to update some standards.
Also, some delivery standards are not easily accessible, which impedes
mailers from obtaining information to make informed decisions.
USPS does not measure and report its delivery performance for most types
of mail. Therefore, transparency with regard to its overall performance in
timely mail delivery is limited. As shown in the table below,
representative measures cover less than one-fifth of mail volume and do
not include Standard Mail, bulk First-Class Mail, Periodicals, and most
Package Services. Despite recent disclosures on its Web site, USPS's
reporting is more limited than the scope of measurement. Without
sufficient transparency, it is difficult for USPS and its customers to
identify and address delivery problems, and for Congress, the Postal Rate
Commission, and others to hold management accountable for results and
conduct independent oversight.
USPS Delivery Standards, Measurement, and Reporting
Source: GAO analysis of USPS information.
aLess than 0.5 percent.
Progress to improve delivery performance information has been slow and
inadequate despite numerous USPS and mailer efforts. Some impediments to
progress include USPS's lack of continued management commitment and follow
through on recommendations made by joint USPS/mailer committees, as well
as technology limitations, data quality deficiencies, limited mailer
participation in providing needed performance data, and costs. Although
USPS has initiatives to improve service and better track mail through its
mail processing system, USPS has no current plans to implement and report
on additional representative measures of delivery performance. USPS's
leadership and effective collaboration with mailers is critical to
implementing a complete set of delivery performance measures.
*** End of document. ***