The U.S. Postal Service lost $163 million in revenue over a 12-month period because it was unable to track a surge in undeliverable packages from e-commerce shippers that treat the carrier as a free disposal service, according to an inspector general’s report published Thursday.
The number of packages that ended up at the Postal Service’s “lost & found” unit because they couldn’t be delivered or returned to sender increased 45% during the 12-month period ending in February, driven in large part by fulfillment centers refusing the packages, the U.S. Postal Service’s watchdog agency said in the audit.
By refusing undeliverable return-to-sender items, which typically come with postage due, e-commerce companies shifted the cost of disposal to the Postal Service. The Postal Service could increase revenue by almost $20 million over the next 13 months if it collected postage due from direct shippers and began assessing a refusal fee.
The Mail Recovery Center received four times more “dead mail” than it reported over three years and only returned less than 1% of missing packages to customers, compared to management claims it returned 39%, because of flawed methods for measuring volumes and the return rate, inspectors also found.
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