The U.S. Postal Service shipped fewer packages and letters by air and reduced spending by 43% in the first three months after UPS took over a primary air cargo contract from FedEx, but incomplete data collection makes it difficult to determine whether the carrier met on-time performance requirements, according to the agency’s inspector general.
The watchdog also found that postal employees failed to properly scan packages before transferring them to the airline and a small number of hazardous material shipments mistakenly slipped into the UPS (NYSE: UPS) network. It urged the postal operator to improve network planning and how it measures UPS’s performance to capitalize on the arrangement’s advantages and address inefficiencies.
“These issues could limit the Postal Service’s ability to assess performance, ensure timely mail delivery, and maintain mail visibility…. While the new agreement is favorable to the Postal Service, improper handling and lack of visibility over the mail moving through the air cargo network could degrade service performance and customer expectations,” the inspector general said in an audit issued last week.
