OIG: USPS has lost track of 35 trailers in the Northeast Area

According to the Office of Inspector General, the US Postal Service has lost track of 35 trailers it leased from contractors. The OIG says the report marks the 19th time they’ve warned the USPS about lax trailer inventory controls since 2001:

uspsoigThe purpose of this alert is to bring to your attention the need for the U.S. Postal Service to immediately inventory and account for its leased trailers in the Northeast Area. We are issuing this alert due to the urgency associated with protecting leased trailers to avoid unnecessary lease and residual value expenses for lost trailers, especially in light of the Postal Service’s financial constraints.

During the course of our project announced in March 2014, Procurement and Use of Common Fleet Trailers – Northeast Area (Project Number 14XG025NO001), we became aware of 35 trailers from the New Jersey Network Distribution Center (NDC) in the Northeast Area that could not be located. Additionally, the Postal Service could not locate any record that they received these trailers from the leasing company even though the trailers were identified at some point in their manual tracking processes.

The U.S. Postal Service Office of Inspector General (OIG) has been expressing concern about the Postal Service’s controls over leased trailers since 2001. The OIG has issued over 19 reports covering leased trailers from March 30, 2001, through September 28, 2009. The reports identified the need for a comprehensive process to routinely identify trailer needs and return unneeded trailers to the leasing contractor; use leased trailers only to move mail and equipment; fully use the satellite-tracking system and tracking devices to locate leased trailers, and safeguard trailers in secured locations. While Postal Service management has taken action in the past to periodically identify and return unused trailers, it has not established an effective inventory system to record and track trailers or to ensure local facilities routinely identify and return unused trailers. Due to our prior findings, continued concerns, and the expense associated with the missing leased trailers of $287,374, we referred this matter to the OIG’s Office of Investigations.

Owned and leased trailers are one of the most cost-effective ways to move large volumes of mail and related equipment. The Postal Service spent more than $39 million in fiscal year (FY) 2013 for leased trailers. Today, about 17 trailer suppliers provide more than 10,000 leased trailers nationally to the Postal Service. Currently, the Postal Service does not have a policy or an inventory system for its leased trailers.

In 2011, the Postal Service established the Delivering Results, Innovation, Value, and Efficiency (DRIVE) initiative. As part of Initiative 1, Optimize Network Operations, the Postal Service established goals for reducing its trailer fleet by 35 percent.6 As a result, plants in the Northeast Area began assessing leased trailer inventory and trailer requirements. During this inventory process, the New Jersey NDC performed an inventory of all trailers on record as having been received to account for them and identify their location. Unfortunately, they could not account for the 35 leased trailers. They were initially determined to be missing and after an extensive search for these trailers, they were subsequently classified as lost.

Conclusion

We confirmed that Postal Service officials in the Northeast Area were unable to account for 35 trailers and could not provide documentation of ever receiving the trailers from the leasing company. The Postal Service continued paying lease costs of $249,454 for the trailers for 2 years (October 1, 2011 to September 30, 2013),7 even though it could not validate their location or use during that period. We confirmed that New Jersey NDC and Northeast Area officials searched for the missing trailers,8 and the search did not reveal any records of trailer movements. As a result, the Postal Service stopped the monthly lease payments in October 2013 and paid the trailer supplier $37,920 for the residual value9 of the 35 trailers. They received the titles in April 2014 for the lost trailers.
We performed our own analysis of the data for the 35 missing trailers in the Transportation Information Management Evaluation System (TIMES)10 and Surface Visibility (SV)11 systems, and confirmed no record of trailer movements or use in Postal Service operations.

Officials were unable to account for these trailers because:

  • The Postal Service does not have an adequate process to document that leased trailers have been delivered and accepted;
  • The Postal Service does not have an inventory system for leased trailers or a process to periodically validate the number of leased trailers on hand;
  • The Postal Service is sometimes inconsistently labeling trailers and incorrectly entering trailer identification numbers or temporary identification numbers12 into SV and TIMES, resulting in incomplete and inconsistent data needed for tracking; and
  • The missing trailers did not have satellite-tracking devices so that area and plant managers could track them.

During our review, we determined that Postal Service Headquarters’ management intends to consolidate leased trailer information in a central database for integration with other systems for better tracking and tracing of leased trailer inventory. Integration relates to the Postal Service’s systems – SEAM (Solution for Enterprise Asset Management) and GPS (Global Positioning System). However, this effort is still in the planning phase.

Because the Postal Service was unable to locate the 35 missing trailers or show details on trailer utilization, we estimate the Postal Service unnecessarily paid $124,72713 annually in leasing costs, or $249,454 over 2 years. In addition, the Postal Service unnecessarily paid an additional $37,920 in damages to the supplier to replace these lost trailers.

  • Nancy

    This is to laugh. Micromanaging postal managers keep track of every movement of craft workers and mailpieces, so as to control and discipline them at their convenience, yet they cannot keep track of large truck trailers??? We had better appoint one supervisor for every trailer out there, I guess.

  • Comedy show

    PMG Donahoe will create a number of high level mgt positions to oversee the trailer situation. You can dress a turd in a tuxedo but its still just a useless piece of …….

  • Mr Zip is worried

    The USPS is just like any other bloated bureaucracy; incompetence reigns supreme. Perhaps the OIG should consider maybe these trailers were S T O L E N, I spelled that out because it seems the whole organization has been dumbed down by the manufactured financial crisis. Someone saw an opportunity to steal equipment from the organization and all the mental midgets in charge of the transportation side were too busy in fighting to realize they’ve been duped; or maybe they have knowledge of this theft-ask them, that dumb look on their face doesn’t mean they are sincere, only that they know they will get away with it because the USPS lacks accountability

  • sinatra

    “WHO’s WATCHING THE WATCHER”; YEAH THAT’S RIGHT. I BELIEVE THEY ARE ON THE SAME BUDGET AS CRAFT(HOUSE APPROPRIATIONS) ; ECXCEPT THEIR BUDGET IS RUBBER -STAMPED & NOT TRANSPARENT
    ACTIVE RETIERED LETTER CARRIER

  • bigtime

    they are not lost , we are hiding mail for stations under route inspections. they will be found day after route inspections are over .

  • MikeS

    Lose 35 trailers and its no big deal. Carrier stops casing for 3 seconds and the boss is ready to issue discipline. No amount of $ is too much to spend on tracking employees but management incompetence is just part of the process.

  • VP of Missing Trailers

    Yup………..management is doing their job……….!!!!!!! If I’ve heard it once, I’ve heard it a thousand times. You CAN NOT do the job and play golf at the same time………..it just won’t work.>!!!!!!

  • Miguel

    I don’t get it… I’ve heard for years that they hide the mail during inspections. Maybe that did happen at some point, but it’s hurts management when they inspect us with low volume. I PREFER to have no mail on inspection. It makes it a no brainer when I request overtime on a 3996. I do it everyday. I have had 4 3999’s with four different certified route inspectors and they all end up with the same results. I don’t care if they cut the route or not. If I’m going to work overtime, might as well do it on my own route.

  • Hector the heckler

    After all this time, postal management is still trying to find someone to blame for this, and finding the actual trailers is not on their mind. They will somehow find some dock expeditor at some failing plant, and try to blame that person, then give each other high fives and return to their Facebook updates, while figuring how much of a bonus they will receive for fixing the problem. Meanwhile, the manager whose brother in law buys scrap metal is hiding the money he made from his back alley sale of those trailers.