U.S. Postal Service:

USPS Needs to Clearly Communicate How Postal Services May Be Affected by Its Retail Optimization Plans

GAO-04-803: Published: Jul 13, 2004. Publicly Released: Jul 13, 2004.

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A key element of the ongoing postal reform deliberations before Congress is the U.S. Postal Service's (USPS) ability to carry out its mission of providing universal mail delivery and retail services at reasonable rates. Many are concerned that USPS's mission is at risk in the current operating environment of increasing competition and decreasing mail volumes. Preserving universal service, particularly in rural areas, is a goal of postal reform. GAO was asked to discuss (1) how USPS provides universal mail delivery services and access to postal services in both rural and urban areas; (2) what changes USPS is making or plans to make related to providing postal services, including changes that may affect rural areas; and (3) what are the major issues that have been raised related to how USPS provides postal services.

USPS provides its customers, regardless of where they live, with services that include mail delivery at no charge and access to retail services. However, differences exist in how, when, and where USPS provides these services. These differences have always existed due to the nation's geographic diversity and changes in technology, transportation, and communications. Universal postal service is not defined by law, but appropriations legislation requires 6-day mail delivery and prohibits USPS from closing small, rural post offices. Delivery and retail decisions are made primarily by local USPS officials with overarching guidance provided by national policies and procedures. Local decisions are based on cost and service factors, including the number and location of deliveries, quality of roads, employee safety, and mail volume. USPS has taken actions, and is planning future actions, to improve the efficiency of its delivery and retail networks. Overall, customers in urban and rural areas will probably not see significant changes in delivery services since most changes are focused on operational improvements. On the retail side, USPS plans to provide more cost-effective and convenient service by developing new, low-cost alternatives; moving stamp-only transactions away from post office counters; and optimizing its retail network. USPS's retail optimization involves tailoring services to communities' needs and replacing "redundant, low-value access points with alternative access methods." It remains unclear how customers in rural areas will be affected by these retail initiatives since most are planned for high-growth, high-density areas. Generally, postal customers are satisfied with the services provided to them. The issues that have raised the greatest concerns from customers include inconsistent mail delivery and the threat of post office closings or reductions in post office hours. Also, concerns have been raised about USPS's limited communication regarding its planned changes to its networks. USPS's retail optimization could be an opportunity for USPS to reduce its costs while improving customer service. However, USPS needs to provide additional transparency and accountability mechanisms to better communicate its retail optimization plans and raise stakeholders' confidence that decisions will be made in a fair, rational, and fact-based manner.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Service has taken actions to address our recommendation aimed at improving transparency and communication of its retail optimization strategy. The Service is finalizing its Retail Optimization Standard Operation Procedures which identifies instructions, factors, criteria, and analysis to guide retail decisions. These procedures also require each Area to develop a Retail Network Optimization Plan that should describe (1) data used to support decisions related to optimizing the Retail Network, (2) the process it will use to communicate the plan to internal and external customers, and (3) the potential impact to the postal customer, both positive and negative, including those in rural areas. The Postal Service indicated that the evolutionary nature of its retail optimization initiative is not conducive to fixed timeframes, and recently stated in its Network Plan required by the Postal Accountability and Enhancement Act that it is committed to continuously improving the quality and functionally of its retail network.

    Recommendation: To facilitate USPS's progress in implementing its planned actions aimed at improving efficiency in its postal network while increasing customer service, the Postmaster General should provide improved transparency and communication to inform Congress and other stakeholders of the actions it plans to take regarding its retail optimization strategy, including (1) the criteria USPS will use to make decisions related to changing its retail network, (2) the process it will use to communicate with postal stakeholders throughout the decision making process, (3) the impact on customers, including those in rural areas, and (4) the time frames for implementing all phases of its retail optimization initiative.

    Agency Affected: United States Postal Service


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