Background
As part of its 10-year strategic Delivering for America plan, the U.S. Postal Service is redesigning its processing network and investing $40 billion to create a modernized network based around regional processing and distribution centers (RPDC). The Postal Service launched its first RPDC in Richmond, VA, in July 2023, consolidating operations from multiple facilities in the Richmond metro and Norfolk, VA, areas into the Richmond RPDC. The Postal Service approved a $25.4 million investment to launch the Richmond RPDC and expects to save more than $185 million over 10 years by reducing mail processing labor and transportation costs, and by closing two leased annexes.
What We Did
Our objective was to evaluate operations and service performance at the Richmond RPDC and follow up on corrective actions taken by the U.S. Postal Service resulting from our prior audit to improve performance. We conducted observations of the Richmond RPDC from October through December 2024.
What We Found
The Postal Service has stabilized operations and service at the Richmond RPDC and achieved most of the expected savings for fiscal year 2024. However, the Postal Service continues to experience challenges with leadership instability, aligning transportation schedules, completing required trailer scans, integrating operations in the region, and low employee availability. These issues contributed to over $2.3 million in questioned costs. If these issues were addressed, the Postal Service would further improve operations and service and reduce costs.
While the Postal Service has improved service performance in the region since January 2024, scores remain below targets. However, service for many classes of mail is in line with nationwide averages.
Recommendations and Management’s Comments
We made six recommendations to address the issues identified in the report. Postal Service management agreed with five recommendations and disagreed with one. Management’s comments and our evaluation are at the end of each finding and recommendation. The U.S. Postal Service Office of Inspector General considers management’s comments responsive to recommendations 1, 4, 5, and 6, and partially responsive to recommendation 3, as corrective actions should resolve the issues identified in the report. Management disagreed with recommendation 2, and we will pursue the recommendation further through the formal audit resolution process.
