Audit: USPS savings claims could be overblown

A new federal audit is questioning the cash-strapped U.S. Postal Service’s estimate that it could save $2 billion a year by moving away from door-to-door delivery.

{mosads}The Government Accountability Office says in the new report that USPS’s estimates were based on data from a 1994 study that the agency has tried to update.

Because the data is almost two decades old, the GAO says it has “limitations for estimating delivery costs and potential savings,” and that it “may not be the best source” of information for lawmakers and postal officials seeking to revamp the agency.

The White House and committee chairmen in both the House and the Senate have proposed shifting postal delivery more to curbs or clusterboxes, as they try to help the USPS get on firmer financial footing.

Postal reform efforts have floundered on Capitol Hill in recent years, as lawmakers fight over whether to roll back Saturday delivery and other matters. The Postal Service wants to keep package delivery on Saturdays but stop delivering letters.

The Postal Service lost $1.9 billion in its most recent quarter, and close to $16 billion in the 2012 fiscal year alone. The agency’s losses dropped to $5 billion in 2013.

The USPS has said that it costs about $380 a year to deliver to a location’s door, a figure that drops to $240 for curb delivery and $170 for centralized clusterboxes. Agency officials defended the data used to estimate the savings from shifting away from door-to-door delivery, saying that how letter carriers deliver the mail has changed little since 1994.

As of 2012, the USPS started forcing new addresses to accept the cheapest delivery mode possible, and the agency has also allowed businesses to voluntarily shift their delivery method.

But the GAO says that USPS is also wary of mandating that existing addresses change their delivery standard, because it fears blowback from customers and businesses.