Background
The U.S. Postal Service is redesigning its processing network with the goal of creating a best-in-class mail and package processing network as part of its 10-year strategic Delivering for America plan. The Postal Service plans to create a modernized network based around regional processing and distribution centers (RPDC), local processing centers, and sorting and delivery centers. The Postal Service spent over $600 million to build out and set up the new 1.2 million square foot Indianapolis RPDC and expects net savings of $1 billion over 30 years from consolidating regional operations.
What We Did
Our objective was to assess the operational impacts related to the launch of the Indianapolis RPDC and identify successes, opportunities, and lessons learned. We reviewed and analyzed financial and service performance data and conducted observations at the Indianapolis RPDC and surrounding mail processing facilities.
What We Found
The Postal Service successfully implemented several key initiatives to launch the Indianapolis RPDC and consolidate operations from nearby facilities. Despite a temporary decline in service performance from November 2024 to February 2025, the facility stabilized operations and improved service.
However, persistent challenges identified after other RPDC launches—such as high absenteeism, poor workplace culture, and unstable management— also presented at the Indianapolis RPDC and undermined operational effectiveness. Significant deviations from the original operating plan increased costs at the Indianapolis RPDC, offsetting anticipated savings. While the changes may save costs nationally, the Postal Service did not analyze cost impacts for the facility and region. The facility also faced difficulties meeting mail scanning targets. Additionally, the Postal Service incurred over $20 million in funds that could have been put to better use due to the purchase of unnecessary and unused mail sorting equipment.
Recommendations and Management’s Comments
Of the seven recommendations in the report, Postal Service management agreed with five and disagreed with two. Management’s comments and our evaluation are at the end of each finding and recommendation. The U.S. Postal Service Office of Inspector General (OIG) considers management’s comments responsive to recommendations 1-3, 6, and 7 as corrective actions should resolve the issues. We will pursue recommendations 4 and 5 through the audit resolution process. See Appendix B for management’s comments in their entirety.
Indianapolis, IN
United States
