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The Postal Service Office of Inspector General (OIG) has not been able to determine what the cost savings will be from the Local Transportation Optimization (LTO) initiative in Richmond, VA., but has concluded its greatest impacts will be on rural communities and individuals who mail letters and packages more than other users of the Postal Service. The OIG noted that the LTO initiative was implemented at the same time the Postal Service was implementing its first Regional Processing and Distribution Center (RPDC) in Richmond, handling Election Mail for local elections, and processing the increased mail volumes during the peak mailing season in the same area. Consequently, the OIG and the Postal Service are not able to identify the specific service and cost impacts of the LTO initiative in Richmond through February 2024.

Generally, this new initiative reduced the number of transportation trips to and from select delivery units from two to three trips per day to one trip per day. The Postal Service will no longer transport originating mail collected at these specific delivery units to the Richmond RPDC the same day it is collected. Rather, the mail will remain at the delivery unit until the next day, delaying its entry into sorting operations. While Postal Service management initially stated this initiative will not impact service performance or require adjustments to service standards, management later stated that once operations in Richmond stabilize, it estimates the initiative will have a 6 percentage point impact on the amount of single piece First-Class Mail and a 1.5 percentage point impact on the amount of overall composite First-Class Mail delivered on time. The Postal Service’s decision to implement this initiative at facilities greater than 50 miles away from a processing facility indicates more rural ZIP Codes will be impacted than urban ones, the OIG stated, and of the ZIP Codes affected by the LTO initiative in the Richmond region, 86 percent were located within rural areas.

The OIG also pointed out that Postal Service management has not notified these communities of the changes resulting from this initiative.