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Postal Service: Automation Is Restraining But Not Reducing Costs

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Report Type Reports and Testimonies
Report Date May 12, 1992
Report No. GGD-92-58
Subject
Summary:

To improve productivity, the U.S. Postal Service has begun a $5-billion automation project that will continue through 1996. Although the program is producing savings in some areas, automation is unlikely to reverse the long-standing tendency for Postal Service costs to outpace inflation. Notwithstanding the decrease in career employment and additional automation that was put in place in 1991, operating expenses for the year grew by almost seven percent and were $295 million more than expected. The decrease in career employment was offset considerably by increases in overtime and noncareer employees. More than half of the work in the Postal Service is not directly affected by automation, and savings achieved by automation are being overwhelmed by increases in labor costs. Finally, Postal Service audits of postal operations have identified inefficiencies in the use of people and equipment in automation--more than $187 million in lost savings in fiscal years 1990 and 1991 alone.

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