A government report issued yesterday said the U.S. Postal Service's complex of 21 bulk mail centers, built in the early 1970s to provide more efficient delivery of packages, has proved to be a $1 billion failure in virtually every respect.
Parcel volume handled by the government service has continued to decline, the Post Office share of package shipments has been eroded, rates have soared and deliveries more often than not have been late or "inconsistent," the General Accounting Office concluded.
Delivery of packages by the Postal Service now is slower than when the bulk mail program was implemented in 1976, although there was some improvement during the normally slow summer months last year.
In a survey of packages mailed from Washington last July and August, GAO found that only 13 percent arrived in Chicago within the four-day delivery period required by current standards. It took 11 days for 95 percent of the packages mailed from Washington to San Francisco to reach the West Coast, several days longer than a Pony Express trip from Missouri to California in 1861.
Comptroller General Elmer B. Staats, who heads the GAO, said the new study raises serious questions about whether the Postal Service will attract enough business to justify continued operation of the regional bulk mail centers. He said is unlikely that on-time delivery standards ever will be met.
Initially, the Postal Service said it would save $300 million a year once the 21 centers were in use, including the Washington regional facility in suburban Largo. But that estimate recently has been scaled down to annual savings of $40 million - a return of less than 4 percent on the $1 billion invested, GAO noted.
"If parcel volume further declines as projected, the system may prove to be more costly to operate than alternative means to move bulk mail," the GAO said in its report, released at a hearing on Capitol Hill yesterday by Rep. Charles H. Wilson (D-Calif.), chairman of the postal personnel and modernization subcommittee.
Wilson, long a critic of the bulk mail centers concept, noted that postal management had promised Congress that the new system would insure profitable operations, faster service, less demage and greater competition with such private delivery firms as United Parcel Service.
Now, he said yesterday. "We are faced with a very serious crisis which jeopardizes the parcel post system . . ."
The Comptroller General's report said simply, "The outlook for the system is grim."
In response, Postmaster General William Bolger conceded that the bulk mail centers have not achieved earlier cost reduction goals. But he said postal management is working to increase volume and improve service. "We believe our efforts . . . are succeeding" he added.
Bolger said the Postal Service is evaluating such alternatives as closing some centers but indicated that such steps are not warranted at this time.
The bulk mail centers long have been a center of controversy. Winton Blount, the appointee of former President Nixon as Postmaster General, began planning the bulk centers in 1969. He said it was necessary to separate handling facilities for letters and packages.
From the beginning, GAO said the $1 billion network promised to give slower service than UPS and, in some instances, then-existing parcel post. GAO said the Postal Service had no evidence to support contentions that it could save money.
As the centers were under construction, a Washington Post series in mid 1974 concluded that $1 billion was being spent for "parcel sorting facilities that promise slower and more damage prone service than the agency's parcel post competitor, United Parcel Service."
After the bulk facilities were put into operation, the Postal Service was embarrassed by evidence uncovered by Rep. Wilson and Congressional staff members that packages were being mangled in the new buildings. More than 3.7 million pieces of damaged parcel post were awaiting claims processing in Chicago, in March 1976, for example.
Yesterday's GAO report had good news on this front, noting that the volume of damaged mail has declined dramatically since 1976. But this improvement also contributed to slower delivery, the GAO found. Among other findings in the GAO report:
Cost is the "primary" concern of parcel mailers and UPS generally offers lower rates. Since the report was written, Postal Service parcel rates jumped 35 percent, pointing to another decline in postal volume related to costs.
From 1961 through 1976, Postal Service parcel volume fell from 800 million pieces to about 338 million. A recent projection based on historical trends indicates a volume of 137 million by 1985. UPS volume jumped 887 percent between 1961 and 1976 to 977 million pieces.
Factors contributing to slow delivery include high volumes of mail that cannot be handled by machines and reliance on railroads for long-distance shipments (with some packages sitting in boxcars at originating centers for 48 hours before being moved.)
In other developments yesterday, Postmaster General Bolger vowed in testimony to hold the line on postal rates until at least the start of 1981 and said Americans can expect better service in the wake of recent rate hikes. He also said proposals to end Saturdau delivery have been put on "the back burner."