The U.S. Postal Service realized just 5 percent of the savings it projected over a two-year period from a controversial decision to slow mail delivery to enable facility closures, according to a new audit.
Postal management told its regulatory body it would save $1.6 billion in fiscal years 2016 and 2017 by eliminating overnight delivery of regular, first-class mail and pushing back some of its two-day delivery to a three-day window, but the mailing agency’s inspector general found it did not even come close to reaching that estimate. USPS instead saw about $90 million in savings, about one-twentieth of its estimate.
USPS implemented the service changes as part of its network rationalization plan, which it unveiled in 2011. A precipitous decline in mail volume required the agency to shrink its footprint, postal management said. In the first phase of its changes, the Postal Service shuttered 141 processing facilities. As part of the second phase, which began in 2015, the agency said it would slow its delivery standards and consolidate another 82 plants. As USPS pushed for more comprehensive legislative reform, it never fully implementedthe second phase of closures, but still fully shuttered 17 facilities and partially consolidated 21 more.