Background
The U.S. Postal Service manages over 21 million Post Office (PO) Boxes throughout the country, collecting $1.5 billion in revenue in fiscal year (FY) 2023. As part of its Delivering for America plan, the Postal Service is focused on improving PO Box revenue, mainly through price increases. Vacancy rates continue to grow, however, and changes in customer preferences and operations pose unique challenges going forward.
What We Did
Our objective was to assess the management of the Postal Service’s PO Box program, including growth strategies. We reviewed Postal Service policies, growth strategies, and performance data, and observed PO Box operations at 12 retail units nationwide.
What We Found
Management oversight of key PO Box program components was inadequate. In FY 2023, 84 percent of districts did not meet delivery timeliness targets; 31 percent of units did not complete required annual PO Box audit reviews; and staff failed to collect about $5.2 million in unpaid reactivation fees. Our visits to 12 units corroborated these issues and identified others, such as staff not completing required PO Box closure procedures, up-time scans, or semi-annual overflow mail reviews. Postal Service officials attributed these collective issues to their focus on other local operational priorities or a lack of staff awareness around requirements. These oversight shortcomings negatively impact program revenues, operational efficiency, and the customer experience.
Regarding program growth, Postal Service efforts to drive PO Box revenues by raising rental prices at select units resulted in a 21 percent increase from FY 2021 through FY 2023. However, nearly 49 percent of all PO Boxes nationwide remain vacant, and future revenues and utilization are at risk based on price increases and changing customer preferences. As PO Boxes are a main access point for many residential and small business customers, it would be beneficial for the Postal Service to conduct a comprehensive review of the PO Box program to analyze how key elements — prices, utilization, service, and marketing — impact current and prospective customer segments across the country.
Recommendations and Management’s Comments
We made two recommendations to improve the PO Box program. Postal Service management agreed to both, and the corrective actions should resolve the issues identified in the report. A summary of management’s comments and our evaluation are at the end of each finding.
