OIG: USPS needs to do more to reduce undeliverable mail

Clipboard01In a new report, the USPS Office of Inspector General says the postal service’s effort to reduce undeliverable as addressed mail (UAA) isn’t effective, and recommends working with mailers to make better use of new technology to solve the problem:

UAA mail is costly, since it must be forwarded, returned, or treated as waste. The Postal Service spent nearly $1.5 billion handling UAA mail in FY 2014, and the mailing industry incurs about $20 billion in UAA costs annually.

According to a 2006 study conducted jointly by mailers and the Postal Service, about 40 percent of UAA mail is caused by the public, primarily because customers do not notify the Postal Service of address changes. Thirty-five percent is attributed to business mailers for reasons including, not updating address lists and having to mail to incorrect addresses to meet other legislative or regulatory requirements.

The Postal Service itself is responsible for about 23 percent due to sorting errors or failed deliveries. The origin of the remaining 2 percent of UAA mail is unknown.

The Postal Service’s UAA mail reduction strategies have not been effective, as evidenced by a 2.1 percent increase in UAA mail from FY 2011 to FY 2014. This ineffectiveness is due to the complexity of the address verification process and conflicting laws and regulations. The Postal Service is working to reduce UAA mail volume that results from the public and the Postal Service. For example, it has made it easier for recipients to change their addresses by providing for online entry. It has also implemented processes to use address changes noted by letter carriers during deliveries.

But many of the Postal Service’s UAA reduction efforts address business mail entering the mailstream and implementation of Seamless Acceptance. Seamless Acceptance won’t eliminate all UAA mail but will offer greater visibility into data associated with each mailpiece. This newly available data will enable the Postal Service to associate UAA mail with the sender and provide opportunities to craft entirely new solutions to ensure address standards are met.

In addition, the combination of Seamless Acceptance and secure destruction brings opportunities for mailers and the Postal Service to share information electronically and eliminate the need to return mailpieces. The Postal Service and stakeholders could reduce costs if they focus on using this new data to develop solutions to the UAA mail problem.

Read the full report (.pdf format)