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24% of USPS real estate is empty space, says audit

Tuesday, August 30th, 2011

As the US Postal Service prepares a major “optimisation” of its infrastructure, an audit by the Office of the Inspector General has found that nearly a quarter of USPS interior space is currently unused.

USPS is currently shaping up plans to cut its processing network by more than half, and its network of 32,000 post offices by 10%, but the audit completed this month suggested that it could start by dealing with its 67m square feet of unused interior space.

The excess space represents 24% of the total 284m square feet that USPS owns or leases, the OIG said, although USPS management disputes the figures.

The Inspector General said the Postal Service had a greater opportunity to deal with the unused space than its target for the 2011 fiscal year, which was to reduce excess space by 2.8m square feet, or 1% of the total.

The audit was carried out ahead of this month’s announcement by USPS executives that they are preparing a major new “Network Optimisation” effort. Nevertheless, the OIG report said disposing of the excess space it has identified could bring in “at least” $3.48bn for the USPS over 10 years, in terms of savings from leases and utility bills as well as realising the value of owned property.

The US Postal Service owns or leases more than 33,000 facilities around the United States, owning about two thirds of its total interior space.

It has three major programs currently underway to improve the efficiency of the network. However, the Inspector General’s report warned that the Postal Service “does not understand” the extent of the excess space in its network – and deos not “reliably” calculate excess square footage.

The OIG report also suggested that better reporting incentives and targets were needed to route out excess space in USPS facilities.

Responding to the OIG findings, USPS management insisted they do use equivalent standards for assessing excess space to those recommended by the OIG, and that monthly reports on reduced square footage go to the chief operating officer.

But, USPS management did not agree with the amount of excess space or financial value of the excess space identified by OIG.

Source: Post&Parcel/USPS OIG

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