Postal Vehicle Service Zero Base Reviews
Our objective was to determine whether the U.S. Postal Service’s Postal Vehicle Service (PVS) Zero Base program was properly implemented and meeting goals.
The Postal Service has a PVS fleet and drivers who are career Postal Service employees to move mail between processing facilities, inner-city delivery offices, and local businesses and mailers. PVS is primarily used for distances within a 50-mile radius of their Postal Service location.
There are 130 processing and distribution centers (P&DC) with about 8,800 drivers and over 26,000 vehicles assigned to PVS operations. In fiscal year (FY) 2018, PVS operations cost the Postal Service over $1 billion in salaries (including overtime), benefits, and fuel.
Transportation management at P&DCs nationwide are required to complete annual Zero Base reviews to optimize PVS operations. These reviews examine and identify recommendations regarding staffing, scheduling, and vehicle usage. P&DC transportation management report PVS Zero Base review recommendations and estimated projected cost increases or savings to headquarters management. Headquarters transportation management identified the need to eliminate stand-by time (when drivers are not needed for a specific trip or related action but are required to be paid) and align schedules and staffing across all tours of operation as part of the Zero Base reviews.
The Postal Service implemented the PVS Zero Base initiative in FY 2014 (renamed PVS Optimization in FY 2017 and the PVS Zero Base Program in FY 2018) as part of the Optimize Network Platform initiative to reduce surface transportation costs by using excess trailer capacity and reducing duplicative trips.
The PVS Zero Base initiative projected savings of $98 million from FY 2014 through FY 2017 but reported increased costs of $21 million due to an increase in labor and fuel expenses. In FY 2018, the Postal Service removed PVS Optimization from the Optimize Network Platform initiative but continues to conduct annual PVS Zero Base Reviews.
What the OIG Found
We determined the PVS Zero Base program did not meet program goals and that opportunities exist to reduce PVS transportation costs.
We reviewed FY 2018 Zero Base review recommendations from a nationwide statistical sample of 82 P&DCs. We identified 74 recommendations for 65 of the 82 P&DCs (79 percent) in our sample. The remaining 17 P&DCs in our sample had no recommendations. Transportation management at these P&DCs determined, based on their PVS Zero Base reviews, that the recommended staffing adjustments and vehicle mileage changes would cost the Postal Service about $30 million in additional costs. However, we found that driver schedules contained hours that were not necessary, resulting in additional costs to the Postal Service. Specifically, the schedules contained:
- Excessive loading and unloading time at service points. Specifically, 5,163 of the 6,734 (77 percent) driver schedules contained loading and unloading timeframes ranging from five minutes to seven hours over the allotted 15 minutes. The common practice is 15 minutes for loading and unloading vehicles.
- Excessive stand-by time. Specifically, 441 of 6,734 PVS driver schedules (7 percent) contained two or more hours of stand-by time (at least 25 percent of total hours) in an eight-hour workday. Postal Service policy states that managers should monitor the use of stand-by time on an ongoing basis to ensure that staffing and scheduling match workload requirements and adjust, as necessary, to minimize nonproductive time.
Additionally, we found discrepancies in the FY 2018 PVS Zero Base mileage and hours analysis, which is conducted to project transportation costs. We reviewed the mileage and hours analysis for the 82 sampled P&DCs and found that the Postal Service excluded 968 of 6,734 (14 percent) PVS driver schedules obtained from Vehicle Information Transportation Analysis and Logistics from the calculation. We also determined that the methodology used to calculate Zero Base review projected costs was inconsistent. For example, transportation managers at 35 of the 82 (43 percent) sampled P&DCs excluded holiday schedules from the mileage and hour analysis, resulting in inaccuracies used to adjust workload requirements.
These issues occurred because standard operating procedures do not provide a consistent approach to allocating time for PVS work assignments. Additionally, management oversight regarding the tracking and monitoring of the PVS Zero Base review recommendations needs strengthening.
As a result, there are missed opportunities to eliminate inefficiencies in PVS Zero Base reviews and PVS driver schedules. The Postal Service could save about $51 million over the next year by removing excessive load and unloading hours and stand-by hours from existing PVS schedules.
What the OIG Recommended
We recommended management:
- Ensure the standard operating procedures provide a consistent approach to allocating time for work assignments within Postal Vehicle Service schedules in order to optimize operations.
- Ensure Area Postal Vehicle Service analysts track and monitor Zero Base review recommendations.