USPS OIG – Network Changes: Regional Transfer Hubs

Background

The U.S. Postal Service implemented the Regional Transfer Hubs (RTH) initiative nationwide as part of its efforts to streamline and modernize its network. The initiative reduces origin separations and moves mail across the country to RTH operations where it is then sorted for destinating facilities. The Postal Service expects this initiative to reduce the overall number of trips needed and transportation costs. As of March 2025, the Postal Service had 18 active RTHs located throughout the country with plans to activate more.

What We Did

Our objective was to evaluate the implementation and effectiveness of the Postal Service’s RTH initiative. We reviewed and analyzed transportation and service performance data from October 2023 through March 2025. Additionally, we conducted site observations and interviewed Postal Service personnel at five RTH facilities during April and May 2025.

What We Found

While the Postal Service had some successes during implementation, we identified opportunities for the Postal Service to better evaluate RTH operations and measure success. Specifically, the Postal Service did not establish unique targets and effective monitoring to evaluate whether RTH performance contributed to identified transportation savings or if impacts to service outweighed the cost. While the initiative aims to reduce trips and transportation costs, the Postal Service did not track actual savings from the initiative and service performance for the highest volume products sent through RTHs were lower than the national average for these products. Additionally, the Postal Service did not establish a unique goal to measure progress towards maximizing utilization, a primary objective of the RTH initiative. Also, the Postal Service did not always conduct required scanning and enforce corrective actions for late departing contracted transportation trips.

Recommendations and Management’s Comments

We made five recommendations to address the issues identified in the report. Postal Service management agreed with two recommendations and disagreed with three. 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 two and three, as corrective actions will resolve the identified issues. We will work with management on the remaining recommendations during the audit resolution process.