oversight

Savings Available Through Reduced Use of Air Parcel Post Shipments by the Department of Defense

Published by the Government Accountability Office on 1971-05-06.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                       B-157476




BY THE CQMPTROLLER GENERAL
OF THE UNITED STATES
    ,--   -.
               i
                                 COMPTROLLER         GENERAL     OF    THE       UNITED   STATES
I              I*)
               -,’                                 WASHINGTON.    D C.       20.548




                     B-157476




                     To the President  of the Senate and the
                     Speaker of the House of Representatives

                            This is our report on the savings available through
                     reduced use of air parcel  post shipments  by the Depart-
                     ment of Defense.

                              Our review  was made pursuant    to the Budget and Ac-
                     c9unting    Act, 1921 (31 U.S.C. 53), and the Accounting   and
                     Auditing    Act of 1950 (31 U.S.C. 67).

                            Copies of this report     are being sent to the Director,
                     Office of Management      and Budget;    the Secretary  of De-
                     fense; the Secretaries     of the Army,    Navy, and Air Force;
                     and the Director,    Defense Supply Agency.




                                                                      Comptroller              General
                                                                      of the United            States




                                               50TH ANNIVERSARY                  1921-1971
COMPTROLLERGENERAL'S                                   SAVINGS AVAILABLE THROUGH REDUCED
REPORT TO THE CONGRESS                                 USE OF AIR PARCEL POST SHIPMENTS
                                                       BY THE DEPARTMENTOF DEFENSE
                                                       B-157476


DIGEST
------

WHY THE REVIEW WAS MADE

       In fiscal    year 1970 the Post Office      Department   billed     the military
       departments     about $177 million  for costs it had incurred            to ship
       military    mail by various   modes of transportation.          Prior work per-
       formed by the General Accounting       Office    (GAO) indicated       that t&&i,-
       tary supplies     were being shipped by air parcel post although             they
       co~Ta"hWe been shipped by more economical           methods.

       That practice       is contrary    to the stated policy  of the military
       departments,     which is to employ the method that will        effect   de-
       livery     of supplies   by the required     time at the lowest cost to the
       Government.      This review was made to examine into the extent          and
       effect     of the practice      at selected  Army, Navy, and Air Force in-
       stallations.


FINDINGS AND CONCLUSIONS

       Supply depots of the Army, Navy, and Air Force have been using
       air parcel post more than is necessary         because transportation
       officials  at those locations      have not, in all cases, estab-
       lished controls   to ensure that the most economical,            yet timely,
       methods of shipping    are selected.      The potential      savings from such
       controls  seem substantial.      For three of the seven installations
       covered by its review,      GAO estimates   that a total      of about
       $520,000 could be saved each year.         About $450,000 a year is be-
       ing saved at two other locations        as a result     of the adoption      of
       controls  recommended by GAO.

       Alternatives          to shipping      by air   parcel   post    include

             --Navy      and Air   Force contractor-operated           domestic   cargo     air-
                lift     systems   (see pp. 7 to 11.)

             --special   types of lower cost airlift             postal     services      to over-
                seas areas (see pp. 12 to 18.)

             --surface      transportation.        (See pp. 19 and 20.)



Tear
---  Sheet
The Vavy could realize      suhstaiitial    savings if its fleet     post of-,
f: C"j at the postal   gateways rcrcened        official   mail bound for
overseas destinations     to select      the least costly    shipment method
consistent  with delivery     requirements.         (See pp. 22 to 25.)

The Army established          such a screening    program at the military
postal    gateways to screen official         mail from Army, Air Force.,
and other Department          of Defense (DQD) activities        and, in fis-
cal year 1969, saved over $5,4 million.               GAO believes    that those
cost reductions         could have been increased      substantially     had DOD
regulations       provided    for showing the delivery      dates on all par-
cels entering        the military    postal  system9 to facilitate       the screen-
ing operations         at the postal   gateways.     Army supply activities      are
already     required     to show the delivery     dates.    (See p. 22 and ppO 25
to 28.)




The Secretary     of Defense should see that procedures           at military          I
                                                                                       ,
supply installations      are revised     to bring about the shipping         of
supply parcels     by the least costly       modes of transportation       that
will  permit delivery     in the required      time.    Those procedures
should ensure that all acceptable           means of delivery     are consid-
ered by military     supply installations        before a shipping    method
is selected.      (See p. 20.)

The Navy should adopt a mai'l-monitoring           program at the Navy fleet
post offices   to select  the 'least costly        means of sending official
mail overseas.    (See p. 25.)

DOD should issue policy       guidance similar    to that of the Army, re-
quiring   all military   services    and other Government activities
using the military     postal   system to indicate     delivery    dates or
similar   information   on supply parcels      so as to facilitate      the
screening    process at the postal gateways.        (See pm 26.)




The Deputy Assistant     Secretary    of Defense (Installations         and
Logistics)   agreed that military      supply installations        should
ship parcel   post packages by the least costly          means that would
permit delivery    in the required     time.    (See p. 33.)       He indi-
cated that the military      services    had reemphasized     their   poli-
cies and procedures     on the use of the least costly         modes of
shipments.

Maximum use will        be made of available     space on Navy and Air Force
contractor-operated         aircraft   to ship supply parcels.     Each of the
military     services    has reaffirmed    or instituted  procedures   to use          ,


                                      7                                                I
      special    types of low-cost airlift   postal               services,  in lieu        of air
      parcel    post, whenever such services   will               meet the required         de-
      livery    dates.

      The Deputy Assistant        Secretary   of Defense found considerable         merit
      in GAO's recommendation         that the Navy establish     a mail-monitoring
      program at the postal        gateways.     (See p. 34.)    The Navy said that
      it could not accomplish         such a program without     more manpower; the
      Office     of the Secretary     of Defense indicated    that it was exploring
      alternative      means of providing     the program to the Navy.

       The Deputy Assistant      Secretary   of Defense did not agree with GAO's
       recommendation    that DOD regulations        be revised      to provide  for show-
       ing delivery   dates on parcel-post-sized            supply packages entering
       the military   postal    system.    (See p. 34.)        He said that such a re-
       vision   would alter   the entire    military     supply system and that DOD
       did not consider     such an alteration       either    practical    or desirable.

       From subsequent         discussions      with officials        from the Deputy As-
       sistant     Secretary's      Office    and from the Department            of the Air
       Force, GAO established            that the additional          step of marking supply
       parcels with delivery           dates or similar         information      would not al-
       ter the military         supply system or its criteria               for establishing
       supply and transportation             priorities.        GAO therefore        believes    that
       the Secretary       of Defense should further              consider     revising      DOD's
       regulations      to require       all users of the military             postal     system to
       mark supply parcels          with delivery        dates.


MATTERS FOR CONSIDERATION BY THE CONGRESS

       This report  is being issued to notify      the Congress of the poten-
       tial for savings by the military      departments    through the use of
       more economical  modes of transportation       to ship supply parcels.




 Tear Shert
                            Contents
                                                                        Page

DIGEST                                                                    1

CHAPTER

   1       INTRODUCTION                                                   4

   2       OPPORTUNITIES FOR REDUCING VOLUME AND COST
           OF MILITARY AIR PARCEL POST SHIPMENTS                          6
               Use of logistics       airlift       systems in
                  lieu   of air parcel        post                        7
               Use of other types of postal              services
                  in lieu   of air parcel          post                  12
               Use of surface      transportation         in lieu
                  of air parcel      post                                19
                      Recommendation                                     20
                      DOD comments and our evaluation                    20

   3       THE MAIL-MONITORING PROGRAM                                   22
               Substantial      savings   possible     through
                  establishment       of Navy mail-monitoring
                 program                                                 22
                     Recommendation                                      25
                     DOD comments                                        25
               Opportunity      for increased      savings     in
                 .Army's mail-monitoring         program                 25
                     Recommendation                                      26
                     DOD comments and our evaluation                     26

   4       SCOPE OF REVIEW                                               29

APPENDIX

       I   Letter  from the Deputy Assistant  Secretary
              of Defense,  dated May 27, 1970                            33

  II       Principal       officials      of the Department   of De-
              fense and the Departments           of the Army,
              Navy Y and Air Force responsible            for the ad-
              ministration          of activities  discussed    in
              this    report                                             35
                               ABBREVIATIONS

DOD          Department        of Defense

GAO          General       Accounting            Office

LOGAIR       Air   Force     Logistics            Airlift    System

MOM          Military       Official         Mail

QUICKTRANS   Navy Logistics            Airlift          System
                                                   SAVINGS AVAILABLE THROUGH REDUCED
                                                   USE OF AIR PARCEL POST SHIPMENTS
                                                   BY THE DEPARTMENTOF DEFENSE
                                                   B-157476


DIGEST
------


WHY THE 2EVIEW WAS MADE

     In fiscal    year 1970 the Post Office      Department billed     the military
     departments     about $177 million  for costs it had incurred          to ship
     military    mail by various   modes of transportation.        Prior work per-
     formed by the General Accounting       Office    (GAO) indicated     that mili-
     tary supplies     were being shipped by air parcel post although           they
     could have been shipped by more economical          methods.

     That practice       is contrary    to the stated policy  of the military
     departments,     which is to employ the method that will        effect   de-
     livery     of supplies   by the required     time at the lowest cost to the
     Government.      This review was made to examine into the extent          and
     effect     of the practice      at selected  Army, Navy, and Air Force in-
     stallations.


FINDINGS AND CONCLUSIONS

     Supply depots of the Army, Navy, and Air Force have been using
     air parcel post more than is necessary           because transportation
     officials     at those locations     have not, in all cases, estab-
     lished    controls   to ensure that the most economical,          yet timely,
     methods of shipping      are selected.      The potential     savings from such
     controls    seem substantial.      For three of the seven installations
     covered by its review,        GAO estimates   that a total      of about
     $520,000 could be saved each year.           About $450,000 a year is be-
     ing saved at two other locations          as a result     of the adoption     of
     controls    recommended by GAO.

     Alternatives        to shipping      by air   parcel    post    include

         --Navy      and Air   Force contractor-operated            domestic   cargo     air-
            lift     systems   (see pp. 7 to 11.)

         --special   types of lower cost airlift              postal     services      to over-
            seas areas (see pp. 12 to 18.)

         --surface      transportation.        (See pp.     19 and 20.)
Tl!p Navy could     realize     substantial     savings if its fleet    post of-
    < : st the postal       gateways screened official        mail bound for
~.,trseas  destinations       to select     the least costly    shipment method
consistent    with delivery       requirements.        (See pp# 22 to 25.)

The Army established           such a screening    program at the military
postal    gateway s to screen official         mail from Army, Air Force,
and other Department           of Defense (DOD) activities        and, in fis-
cal year 1969, saved over $5.4 million.                GAO believes    that those
cost reductions          could have been increased       substantially    had DOD
regulations       provided     for showing the delivery       dates on all par-
cels entering        the military     postal  systems to facilitate       the screen-
ing operations         at the postal gateways.        Army supply activities      are
already     required      to show the delivery     dates,     (See p. 22 and pp. 25
to 28.)




The Secretary     of Defense should see that procedures          at military
supply installations      are revised     to bring about the shipping        of
supply parcels     by the least costly      modes of transportation       that
will  permit delivery     in the required     time.    Those procedures
should ensure that all acceptable          means of delivery     are consid-
ered by military     supply installations       before a shipping    method
is selected.      (See p. 20.)

The Navy should adopt a mail-monitoring           program at the Navy fleet
post offices   to select  the least costly        means of sending official
mail overseas.    (See p. 25.)

DOD should issue policy      guidance similar    to that of the Army, re-
quiring   all military   services   and other Government activities
using the military     postal system to indicate      delivery    dates or
similar   information   on supply parcels     so as to facilitate      the
screening    process at the postal gateways.       (See p. 26.)




The Deputy Assistant     Secretary    of Defense (Installations         and
Logistics)   agreed that military      supply installations        should
ship parcel   post packages by the least costly          means that would
permit delivery    in the required     time.    (See p. 33.)       He indi-
cated that the military      services    had reemphasized     their   poli-
cies and procedures     on the use of the least costly          modes of
shipments.

Maximum use will        be made of available     space on Navy and Air Force
contractor-operated         aircraft   to ship supply parcels.     Each of the
military     services    has reaffirmed    or instituted  procedures   to use


                                      7
    special    types of low-cost airlift   postal             services,  in lieu        of air
    parcel    post, whenever such services   will             meet the required         de-
    livery    dates.

    The Deputy Assistant        Secretary   of Defense found considerable         merit
    in GAO's recommendation         that the Navy establish     a mail-monitoring
    program at the postal gateways.            (See p. 34.)    The Navy said that
    it could not accomplish         such a program without     more manpower; the
    Office     of the Secretary    of Defense indicated     that it was exploring
    alternative      means of providing     the program to the Navy.

    The Deputy Assistant      Secretary   of Defense did not agree with GAO's
    recommendation    that DOD regulations        be revised      to provide  for show-
    ing delivery   dates on parcel-post-sized            supply packages entering
    the military   postal system.       (See p. 34.)        He said that such a re-
    vision   would alter   the entire    military      supply system and that DOD
    did not consider     such an alteration       either    practical    or desirable.

    From subsequent        discussions      with officials        from the Deputy As-
    sistant    Secretary's      Office    and from the Department             of the Air
    Force, GAO established           that the additional          step of marking supply
    parcels with delivery          dates or similar         information      would not al-
    ter the military        supply system or its criteria               for establishing
    supply and transportation            priorities.        GAO therefore        believes    that
    the Secretary      of Defense should further              consider     revising      DOD's
    regulations     to require       all users of the military             postal     system to
    mark supply parcels         with delivery        dates.


MATTERS FOR CONSIDERATION BY THE CONGRESS

    This report  is being issued to notify      the Congress of the poten-
    tial for savings by the military      departments    through the use of
    more economical  modes of transportation       to ship supply parcels.




                                               3
                                        CHAPTER 1

                                   INTRODUCTION

        The General Accounting              Office    has examined into the
practice     of shipping          supplies     by air parcel      post from se-
lected     supply     installations         of the Departments        of the Army,
'<avy, and Air Force.               In fiscal     year 1970 the Post Office
Department      billed       the military        departments    about $177 mil-
lion    for costs it had incurred                to ship military      mail by var-
ious modes of transportation.                    We made this review       to deter-
mine whether        significant         numbers of supply packages were be-
ing mailed       by air parcel          post when they could have been
trazlsported      in the required           time by more economical         methods.
The scope of our review               is described       Ln chapter    4.

         DOD guidance      for selecting      the mode of transportation
for supply      shipments       is set out in DOD Regulation           4500.32-R,
entitled     "Military       Standard    Transportation         and Movement Pro-
cedures."       Although      this regulation        does not address       itself
specifically         to the use of air parcel           post,    it has stipulated
since prior        to our review      that airlift       is the preferred        mode
of transportation          for *'high priority        materiel."

         The supply     issue priority           of materiel     is designated         by
the requisitioning           activity       and can range from a priority
1 item, which is materiel                urgently       needed for combat oper-
ations,     to a priority          20 item, which is materiel            needed for
routine      stock replenishment.              Regulation     4500.32-R       groups
the 20 supply priorities               into four transportation            priorities
and stipulates        time standards           for military      supply     installa-
tions     to process      requisitions         and to accomplish        delivery       of
the items to the requesting                 activities.       The following         table
illustrates       these requirements.
                                                       Time standards       from
                                                        date of requisition
                                                    to delivery    of materiel
Issue priority           Transportation             Continental
   designator                priority              United   States       Overseas
   1   through    3                 1                 120   hours          168   hours
  4    through    8                 2                   8   days            30   days
  9    through    15                3                  20   days            45   days
 1.6   through    20                4                  30   days            60   days

                                            4
         The stated     policy    of the military       departments        is to em-
ploy the mode of transportation              that will      effect     delivery      of
supplies      at the final       destination    by the required          time at
the lowest      overall      cost to the Government.           Air parcel       post
is used frequently           as a means of shipping         transportation
priority      1 and 2 parcels        when the items to be shipped              are
within     the weight      and size limits      established        by the Post
Office     Department.

       At certain       supply      installations       covered      by our review,
transportation        audits      had been made by internal                auditors  of
the responsible        military        departments;      however,        these audits
did not relate        to the      selection       of air parcel        post as a
transportation        mode.       At the other supply           installations,        in-
ternal     auditors     advised       us that their      audits      had not covered
the use of air        parcel      post.
                                          CHAPTER 2

            OPPORTUNITIES FOR REDUCING VOLUME AND COST

                    OF MILITARY     AIR PARCEL POST SHIPMENTS

        Supply installations         of the Army, Navy,and          Air Force
have been shipping          by air parcel     post substantial         quantities
of supplies      which could be delivered           expeditiously         by less
costly     modes of transportation.           We   believe    that    air   parcel
post is used more extensively             than necessary        because person-
nel at the installation           level  have not adequately           considered
the use of alternative           methods of delivery         and have not es-
tablished      controls     to ensure that the least          costly,      most
suitable,      methods of shipping        are selected.         Also, we found
that guidance        disseminated     to and within        some supply      instal-
lations      was not always fully       consistent       with transportation
instructions       issued by DOD and the military             departments.

      Other     modes of       shipping       parcels       which   have not   been
adequately      utilized       are

        --Navy and Air Force contractor-operated      domestic cargo
           airlift     systems, referred to as QUICKTRANS and LOGAIR,
           respectively,

        --special    types of lower cost                airlift     postal   services
           to overseas    areas, and

        --surface       transportation.

         At three of the seven military       installations        which we
visited,      we were able to identify     potential        annual savings
estimated       at about $520,000   if other    shipping      modes were
used in lieu        of air parcel post.    Annual savings         of about
$450,000      are already   being realized    as a result        of the adop-
tion by two Air Force Air Materiel           Areas oflrevised         shipping
procedures       which we recommended previously.


1                                     "Management  Of The Logistics
    See GAO report  to the Congress,
    Airlift  System Contracted  For By The Air Force"  (B-157476,
    December 18, 1969).

                                               6
USE OF LOGISTICS AIRLIFT SYSTEMS
IN LIEU OF AIR PARCEL POST

         Logistics       airlift       systems known as QUICKTRANS and LOGAIR
have been established                 by the Departments            of the Navy and Air
Force,     respectively,            to provide    rapid        transportation         of high-
priority       materiel        within     the continental          United     States.
These systems are operated                   by commercial          air carriers        under
contracts        providing        for scheduled        airlift        service    over es-
tablished        routes.         These routes      link major supply             installa-
tions with using activities                   as well      as with aerial          ports    of
embarkation.

         Contract    payments for the operation         of QUICKTRANS and
LOGAIR aircraft          are based on the distances       flown and the
landings      made, without      regard    to the amount of cargo trans-
ported.       Therefore,     when aircraft      space is available   for ad-
ditional      cargo,     the cargo can be transported        without any in-
crease in the contract           payments.

       Our review     of QUICKTRANS and LOGAIR aircraft               utiliza-
tion reports      showed that the aircraft             seldom had been loaded
to capacity.        Space was very often          available     to ship air
parcel     packages either     on partially        loaded pallets       or as
baggage compartment        cargo.       We also found that some Navy and
Air Force installations         had routinely          shipped high-priority
supply parcels       by air parcel        post to activities        serviced       by
the airlift      systems.    This practice,          which we believe         is
contrary      to Navy and Air Force instructions               encouraging
maximum use of logistics          airlift      systems,     has resulted        in
postal     costs which could have been avoided.

Department       of   the Navy

         Our review   at the Naval Supply Centers      in Oakland,   Cal-
ifornia,     and Charleston,   South Carolina,    indicated     that
about $243,000       could be saved annually   if these two instal-
lations     used QUICKTRANS rather   than air parcel       post for
selected     shipments.

        Since prior    to our review,    the instructions     in the
Naval    Supply Command Manual have provided           that supply parcels
which    will  be shipped   domestically    and which qualify      for air
transportation         be moved by commercial            contract     airlift       sys-
tems, such as QUICKTRANS,             to    the   extent    that   such      systems
are available.           Neither    Center,     however,      had established
procedures       to ensure that supply parcels                scheduled       for do-
mestic      shipment     by air parcel        post would be considered              for
shipment       by QUICKTRANS.        Our analysis        of QUICKTRANS aircraft
utilization        reports     showed that many of the parcels                  sent by
air parcel       post could have been shipped               in unused QUICKTRANS
aircraft       space.
       Our analysis     of postal       shipments       made from Oakland
during    a 76-day period        showed that about 276,000 pounds had
been shipped      domestically        by air parcel        post and by special
handling,     a type of postal         service    in which parcels        are
moved by expeditious          surface    modes.      Further    analysis      showed
that 41 percent,      or 113,000 pounds, had been shipped                   to
naval activities      regularly        serviced     by the QUICKTRANS sys-
tem.     Since the QUICKTRANS aircraft             utilization      reports
showed that unused aircraft             space was generally         available,
most, if not all,       of the 113,000 pounds could have been
shipped     by QUICKTRANS.

        We estimated     the costs of shipping         the 113,000 pounds
of parcels      to QUICKTRANS stations        during     the test period      by
using average Post Office          Department      costs applicable        to do-
mestic    air parcel     post and to special        handling.      Projecting
these costs to an annual basis,           we estimated        that the Oak-
land Supply Center could reduce postal                service    costs by ap-
proximately      $175,000    by using QUICKTRAVS to ship parcels              to
stations     serviced    by that system.

      By making similar     analysis   of postal  shipments   from
the Charleston   Supply Center,      we estimated  that postal     costs
of about $68,000   annually     could be avoided   if the Charleston
Center used QUICKTRANS in lieu of air parcel          post.

        We advised   officials      at the Oakland and Charleston
centers,     as well as officials        of the Naval Supply Systems
Command, Washington,          D.C., of our observations;       and they
agreed with the principle           of using qJIC&TRANS in lieu of air
parcel    post.    Oakland officials       stated that they had sent
to the Naval Supply Systems Command certain              information      con-
cerning    the use of QJICKTRANS aircraft         for shipping       supply
parcels    and that they had asked for its evaluation.
       Officials    of the Charleston         Supply Center stated         that
some additional       documentation       and handling     was required        for
a QUICKTRANS shipment.           In reviewing      the shipment-processing
time standards      established       at the Charleston       Center,   we con-
firmed    that certain      documentation      and handling      effort    which
was not required       for air parcel        post shipments      was required
for QUICKTRANS.        However,     the additional       cost involved--es-
timated     to be $1.11 a shipment,          compared with a cost of
$4.84 for an average air parcel             post shipment--still         indi-
cates that substantial          savings    are available      through    the use
of QUICKTRANS.        We included      an estimate     of this cost in our
computation      of the potential       savings    that Charleston       offi-
cials   could realize       by using QUICKTRANS in lieu of air par-
cel post.

Department     of   the Air   Force

        For materiel   requiring        air transportation,        Air Force
Manual 75-1, since prior            to our review,      has stated       that
LOGAIR should be fully         utilized      when available.         Also,    in-
structions      issued in December 1967 by the Air Force Logistics
Command to its Air Materiel             Areas state      that air-eligible
parcel-post-sized      shipments        should be moved by LOGAIR unless
more than one en route         transfer      is required.      This require-
ment does net apply to items that are critically                     needed.

        Our review       at the San Antonio      Air Materiel      Area indi-
cated that numerous parcels             had been shipped      by air parcel
post rather       than by LOGAIR because local          instructions       for
determining       the mode of transportation          were not fully       consis-
tent with those issued by the Air Force Logistics                     Command.
The local      instructions     appeared    to encourage       the use of air
parcel     post rather      than the use of LOGAIR.          These instruc-
tions    provide     that high-priority       parcels   be shipped       by air
parcel     post or by weapons system pouch to activities                  ser-
viced by LOGAIR when a             en route    transfer    is required.
Weapons system pouch is a type of airmail                 service     used for
registered       parcels.

         Our tests    of shipments   made during    a -/-day period
showed that at least         878 high-priority     parcels  had been
mailed     by air parcel     post and by weapons system pouch to ac-
tivities     serviced    by LOGAIR.      In many instances   these par-
cels could have been shipped           by LOGAIR and could have been

                                          9
delivered   without   any en route transfers.        Our analysis    of
aircraft  utilization    records    for scheduled    LOGAIR flights
departing   San Antonio    during    the 7-day test period     showed
that none of these flights        had been fully   utilized.

       Since our test at the San Antonio              Air Materiel       Area
was very limited,        we did not attempt        to estimate       the postal
costs for shipments        made to activities         receiving      LOGAIR ser-
vice.     The records     of that activity,       however,       showed that
it mailed     149,000 air parcel        post shipments        weighing     more
than 1,756,OOO pounds to installations                 in the United       States
during    the 12-month     period    ended January       31, 1969.       In   our
opinion,     substantial    reductions       in postal    costs could be
achieved     by the San Antonio       activity     if an effort        were made
to divert     air parcel    post packages to the LOGAIR system.

        Other Air Force activities      have diverted         air parcel
post packages to LOGAIR.         By diverting       substantial    quantities
of supply parcels      from air parcel      post to LOGAIR, the Air
Materiel     Areas at Warner Robins,       Georgia,     and Sacramento,
California,      were able to reduce postal         costs by about
$337,000     annually.

       Before October            1967 the Warner Robins activity                       normally
used air parcel            post for transporting               high-priority           parcels
 to activities          serviced       by LOGAIR when en route transfers                       of
cargo were required.                 From the Warner Robins activity,
LOGAIR shipments            can be made to all 73 LOGAIR stations                          by
direct     flight       or by flight         with one transfer             en route.        We
discussed        the practice         of shipping         priority       parcels       by LOGAIR
with Warner Robins transportation                       officials        in October        1967,
and they agreed at that time with our proposal                                 that LOGAIR
should be used in lieu of air parcel                          post for most of these
shipments.           Our analysis         of shipments         made from the Warner
Robins activity            before     and after       its change in shipping
procedures         indicated       that,     during     the 12-month           period     sub-
sequent to October             1967, parcels          weighing       a total        of at
least    497,000        pounds were diverted              from air parcel            post to
LOGAIR.        On the basis of reported                 Post Office          Department
costs,     we   estimated        that     postal     costs     during      this     period
were reduced by about $240,000.                       Warner Robins transporta-
tion officials           advised      us that space on LOGAIR aircraft
normally       was available          for.transporting             supply parcels.



                                              10
       As a result      of our inquiries,         the Sacramento        Air Mate-
riel   Area also increased         its use of LOGAIR for shipping
supply    parcels.      Our analysis        of shipments     made before          and
after    our discussions      with Sacramento         transportation          offi-
cials    showed that shipments          to LOGAIR destinations            by air
parcel    post and by weapons system pouch had been reduced
substantially.         We estimate      that the Sacramento          activity!s
change in procedures         will    result    in annual     postal     cost re-
ductions       of about $97,000.




                                          11
USE OF OTHER TYPES OF POSTAL SERVICES
IN LIEU OF AIR PARCEL POST

       Other types of postal               services,      such as Military            Offi-
cial   Mail (MOM) and special               handling,      are available          for
shipping     supply parcels           to overseas       areas at considerably
less cost than that of air parcel                    post.      MOM parcels         mailed
from installations           in this country           are transported          by sur-
face modes to postal             gateways       and then airlifted          to over-
seas areas at special             rates which are lower than air parcel
post rates.        MOM does not receive              the expedited         service       and
handling     given to air parcel              post.     Parcels      shipped      by spe-
cial   handling      receive      first-class        handling      to expedite
shipment     by surface        transportation          modes within       this country
and receive      airlift       service       similar    to MOM from postal
gateways     to the overseas            destination.        The postal        rates      for
MOM and special          handling       are the same except that,               for spe-
cial   handling,        a fee ranging         from 25 cents to 50 cents a
package is charged for the preferential                       treatment      necessary
to expedite      the processing            of the package.

       For cost purposes,           both MOM and special             handling       are
considered      as fourth-class         mail by the Post Office                 Depart-
ment and their        total    costs are accumulated              with the costs
of all fourth-class           mail.     The most recent           Post Office        De-
partment    Revenue and Cost Analysis               Report,       dated April         6,
1970, showed that the cost for shipping                     parcels       domesti-
cally    by fourth-class         mail (surface        modes) averaged
21.5 cents a pound.            In comparison,         Post Office         officials
advised    us that the cost for shipping                 priority      mail,       which
includes    domestic       air parcel     post,     averaged       37 cents a
pound.     With respect        to the postal        costs for airlifting
these parcels       from the continental            United      States      to over-
seas destinations,          Air Force and Army directives                  contain
the various      Post Office        Department      rates     per pound for
shipments     to various       overseas     locations.          The average rate
set forth     in these directives           is 61 cents a pound by MOM,
compared with 88 cents a pound by air parcel                         post.

         As mentioned    in chapter     1, the military     standards    for
delivery     of transportation      priority   1 and 2 items to over-
seas activities       are 7 days and 30 days, respectively,            from
the date on which the supply requisition                was initiated.       A
priority     delivery    date is established       for each supply     item

                                             12
requisitioned          and is based upon the (1) priority              assigned
to the requisition           by the ordering     activity,       (2) military
delivery      standards,       (3) location   of the ordering          activity,
and (4) requisition           date.     Under certain      circumstances,         an
activity      requisitioning         an item may specify        a required       de-
livery     date different         from the usual priority         delivery
date.

         In the narrative        that follows,       we use the term "deliv-
ery date"      to denote either          the required       or the priority         de-
livery     date.      At the seven supply installations                 which we
visited,      we tested     a significant         number of transportation
priority      2 parcels     shipped      by air parcel        post,   to compare
 the number of days remaining               before   the delivery        of the
package was required           with the maximum average of transit
 times for MOM shipments             to destinations        in various       coun-
 tries.     We found that,         for a very high percentage              of these
 shipments,      sufficient      time remained       to permit       shipment      by
MOM. On the basis of our test,                   we believe      that there is a
real potential          for reducing       shipping    costs by using MOM in
 lieu of air parcel         post.       (See p* 15.)

        We found that it was impractical                       to fully    measure the
cost savings         which could be realized                if MOM or special
handling      were used in lieu             of air parcel         post.     There were
too many variables             involved      with respect         to requisition          de-
livery     dates,      transit      times,     and shipping         distances.          How-
ever,     at two of the installations                  reviewed--the        Naval Sup-
ply Center,       Oakland,        and the Warner Robins Air Materiel
Area--we      identified         annual savings          amounting       to about
 $324,000.       Following        is a discussion           of our tests         of de-
livery      days remaining          for selected         transportation          priority
 2 packages      at the installations               that we visited;           the mail-
ing practices          at these installations;                 and the Army, Navy,
and Air Force regulations                  describing        the types of postal
 services      available,

Test of delivery       days remaining
on selected   priority     2 items

      Army and Air Force directives     contain    average     transit
times for the various   types of postal     services.       These
times are computed on the basis of shipments          mailed     from
the central  area of the continental     United    States    to the


                                             13
    specific  overseas country. Some examples of transit  times
    by MOM, air parcel post, and surface mail are shown in the
    following  table.
                               Average days of transit    time
        Overseas area      -MOM Air parcel post      Surface mail

           Japan             9              4                  23
           Korea             8              4                  36
           Okinawa           9              4                  30
           Thailand          9              4                  44
           Vietnam           9              4                  41
           Germany           7              3                  21
           Spain             7              3                  27
           Italy             7              3                  25

           The transit    times shown in Army and Air Force direc-
    tives compare favorably          with those which we computed from
    information    contained in a Navy directive        and a Post Office
    Department study.        The Navy directive     showed average tran-
    sit times for MOMshipments from the postal gateways to
    overseas areas, whereas the Post Office Department study
    showed average transit         times for surface shipments from
    various locations       within the continental     United States to
    the postal gateways.          Combining the two documents, we have
w   computed that the maximum average transit           time for shipping
    Navy supply parcels from installations           in the continental
    United States to overseas destinations           by surface mail and
    MOMvaries from 4.3 days to 13.8 days.

            In our test of the shipment of transportation         priority
    2 parcels by air parcel post, which was designed to deter-
    mine if that mode of transportation         seemed necessary, we
    considered 14 or more days remaining before expiration              of
    the delivery    date as sufficient   time to permit the use of
    MOMin lieu of air parcel post.         Our test showed that, of
    all the parcels shipped by air parcel post from the instal-
    lations    to overseas areas, 89 percent--3,183--could         have
    been shipped by a less costly method and still          could have
    been delivered     by the stipulated   delivery   date.   The de-
    tails    of our test are summarized in the following        table.




                                       14
                                                                                                                                      Parcels  shipped  with   14
                                                                                                           Number of                   or more days of unex-
                                                                                                      parcels      shipped               pired delivery  time
        Supply         installation                                   -Test     prrlod                       (note    aj              Number             Percent

Army   Depots:
      Atlanta,             La.                         Nov.        4 to       11, 1968                           264                       232                       87.9
      Annlston,             Ala.                       Nov.        1 to       7, 1968                            123                        66                       53.7,
Naval     Supply           Centers:
      Charleston,                S.C.                  Sept.  1 to 30, 1968                                      393                       319                       81.2
      Oakland,             Calif.                      Nov. 27, 1968,  to
                                                         Feb. 11, 1969                                           12qb                       91                       70.5
Air     Matcrlel       Areas:
        Kelly    Air    Force    base                  Feb.        16 to 22, 1969                                 527                    482                         71.5
        McClellan       Air   Fol-ce aase              Oct.        1 to Nov. 30, 1568                             151b                   138                         91.4
        Robins     Air    Force    Base                Sept.         19 to 29, 1968                            1,996                  1,855                          9Z.Y

                 Total                                                                                         3,583                  3,183                          86.8


aItems        having        an expired      delivery          date     when      mailed     were    excluded     from     our      test.
b
    Random       sample       of items    shipped.            At     other      locations     the    amounts      shown      are     the    number   of    parcels
    shipped       during        test periods.



                 Department                      of the Army regulations

      Army guidance for determining  the appropriate     type of
postal service is included in Army Regulations      55-16, dated
September 18, 1968, and 341-10, dated April 24, 1968.
These regulations   set forth postal costs and transit      times
for MOM, air parcel post, and surface mail shipments to
overseas areas and provide that the most economical type of
postal service which meets requirements    of the requisitioner
be used.   In regard to the use of MOM, Army Regulation
341-10 states that:

                  'I-?;** the advantage of MOMservice is that it                                                                                          pro-
                  vides a cheaper mode of airlift,      yet assures                                                                                       de-
                  livery     within a time span approximating   that                                                                                      of
                            b
                  a premium airmail      service."

       At the                           Atlanta Army Depot, Atlanta,    Georgia, and at
the Anniston                             Army Depot, Awiston,   Alabama, no use was be-
ing made of                             MOMto ship priority   2 items to overseas des-
tinations.                              Priority 2 items were routinely    mailed by air
parcel post                             at these depots.

       Transportation     official s at both depots advised us
that air parcel post was being used for mailing priority           2
items to overseas locations        because they believed that the
preferred    mode of transportation      for priority  1 and 2 items
was airlift.       A statement to this effect is included in
DOD's Military      Standard Transportation     and Movement
Pr oci-oile 3 regulation*            The regulation    also provides,    how-
ever,     that,    when airlift       is unnecessary     to meet the re-
quired      deliveq~   date,      other high-speed     modes of transporta-
tion be used.

      Prior  to completion    of our review,    transportation
procedures   at the Atlanta    Army Depot were revised         to pro-
:Tlde for the use of MOM for priority        2 shipments.        We esti-
mate that the Atlanta      Army Depot makes about 24,250 prior-
ity 2 shipments    to overseas   locations    annually.

        At the Anniston     Army Depot, however,       officials      turned
down our suggestion       that selected     priority    2 shipments        be
EQZ? by MOM. They advised           us that they felt        that their
mission    was to provide     a service    which could be accom-
plished    best by using air parcel        post,     We estimate      that
the Anniston      depot makes about 9,700 priority             2 shipments
to overseas     locations    annually.

       Department       of the     Navy instructions

       Navy- guidance     for selecting     the most economical        type
of postal    service    is contained     in Notice     2700, dated
&arch 2, 1961, issued by the Office             of the Chief of Naval
Operations.      One type of service        described    in this notice
is qecial     handling.       The notice    also sets forth     transit
times for shipments         of various   classes    of mail to overseas
areas.

       At the Naval Supply Center,      Oakland,      instructions       had
been issued by the commanding officer          that priority         2 items
be mailed     by special    handling.  Other instructions          issued
by the installation's        Material Department,       however,     provide
that priority      2 items having certain    project       codes be
mailed   to overseas     areas by air parcel     post.

        Our analysis      of postal   shipments     made from the Oakland
Center during        a 76-day period     showed that priority        2 parcels
weighing,      in total,    about 251,700 pounds and 204,400 pounds
had been shipped         by special   handling     and by air parcel
post,    respectively,      to overseas     areas.     Our analysis    also
showed that about 93 percent           of the air parcel       post ship-
ments had been mailed         through    the San Francisco       Fleet   Post
Office,     located    only a short distance        from Oakland.
According to personnel at the fleet post office,         parcels
marked '"special handling"     and "air parcel post" are shipped
on the same airplane    from the United States.      Although the
air parcel post parcels are entitled       to receive preferen-
tial treatment after the airplane       has landed, experience
has shown that, with few exceptions,       parcels marked "spe-
cial handling"   are delivered    on the same day as are air
parcel post parcels.

      On the basis of the volume of priority   2 shipments
mailed to the San Francisco Fleet Post Office during our
test period, we estimated that annual savings of about
$212,000 could result from the use of special handling in
lieu of air parcel post for priority   2 shipments to over-
seas areas from the Oakland Supply Center.

       We discussed this subject with transportation         offi-
cials at the Supply Center, who recognized         that their in-
structions      concerning the shipment of priority     2 items were
inconsistent.       As a result,  new instructions    were issued,
requiring     the use of special handling in lieu of air parcel
post for shipping priority       2 items to overseas areas.

       At the Charleston    Center, we found that priority    2
items were being routinely       shipped to overseas areas by air
parcel post and that no items were being shipped by special
handling.    Transportation    personnel advised us that they
were not familiar    with special handling.      At the conclusion
of our review, officials      at the Charleston Center stated
that they saw no reason why special handling could not be
used for mailing priority      2 parcels to overseas areas and
that they would give consideration       to its use.

     Department   of the Air   Force instructions

     Air Force Manual 75-l states that priority      2 parcels
will be mailed by MOMexcept in unusual cases when airmail
is required because of the delivery  date.    Transit   times by
MOM, air parcel post, and surface mail are included in Air
Force Manual 10-5.

      At the three Air Materiel   Areas covered by our review,
large quantities   of priority  2 parcels were being mailed to
overseas areas by air parcel post.      The use by these

                                 17
PC _iT   :      .-,t;   air   F”rC.63~.   Foe??-  for
                                                  mailing     priority      2 items
(2p"-i&~->;
  *        pt1..,-y L r;ul::ed from       ;;uidance
                                                  issued by the Air Force
Lo,-,i c:ij 2; Car,-!riLand in May i968.       This guidance         provided    that
.ricrity          2 items in certain      Federal    supply classes         and
groups be maiied             by air parcel   post.      The guidance        did not
provide         for considering     the delivery       dates.

         As a result       of the Air Force Logistics       Command's May
lL;I,E; instructions,        the Warner Robins activity"s       monthly
priority       2 shipments      by MQM have decreased     from an average
of 5.310 to 1,430 and those by air parcel               post have in-
creased      proportionally.

       Before receiving         the mailing      guidance,       the Warner
Robins activity         was realizing       substantial       postal     savings    by
using FlQX in lieu         of air parcel      post.      As early       as October
1967, Warner Rabins officials              had acted on our suggestions
to revise     their     procedures     to provide       for the use of MOM
for such shipments.            Our analysis      of priority         2 shipments
mailed   before     and after      the activity%          change in procedures
showed that,       during    the 7-month period          October      1967 to May
1968, parcels       weighing      a total    of about 375,000 pounds were
shipped    by MOM which,        under prior      procedures,        would have
been shipped       by air parcel       post.     On the basis of costs re-
ported   by the Post Qffice           Department,       we estimated       that
postal   savings     within     the continental         United     States    approxi-
mated $112,000       for these shipments.




                                               18
USE OF SURFACE TRANSPORTATION
IN LIEU OF AIR PARCEL POST

       In our analysis       of air parcel       post shipments,        we noted
instances      in which shipments         were made by air parcel         post
which should have been made by surface                transportation.
These shipments       involved       supply parcels     not normally      eli-
gible    for air transportation           because of their       low priority
and supply parcels         sent to nearby destinations             where air
transportation       offered    little     or no advantage.

         Although     all   installations        generally     were shipping     low-
priority       supply parcels          by surface    transportation,      we found
noteworthy        exceptions       at the Naval Supply Center,          Charleston,
and at the Atlanta            Army Depot.

      At Charleston      we tested   the air parcel   post shipments
made during      September    1468 and found that approximately
12 percent     were low-priority     items which,   under normal cir-
cumstances,      are not eligible    for ,shipment  by air parcel
post.    Similarly,     at the Atlanta    Army Depot, our test during
the period     November 4 to 11, 1968, showed that about 10 per-
cent of the parcels        shipped by air parcel    post had been as-
signed low priorities.

        We discussed    these shipments     with transportation       offi-
cials    at both installations,        They assured us that there
were no justifications          for the shipments   and that,      in the
future,    controls    would be established      to prevent     unneces-
sary air shipments.

         Also at the Atlanta          Army Depot, we found that high-
priority       supply parcels        were being mailed         by air parcel
post to activities           located      within     150 miles    of the depot.
Conversely,        at the Anniston         Army Depot, procedures          had been
established        for using      surface      mail in lieu     of air parcel
post for shipments           to activities         located    nearby in Alabama
and adjacent         states.      Similar      procedures    were subsequently
established        at the Atlanta         Army Depot after        we brought     this
matter      to the attention         of depot officials.           On  the  basis
of the volume of air parcel                post shipments       made from the
Atlanta       Army Depot to activities             located    nearby in Georgia
and adjacent         states    during     an 8-day test period         and of the
Post Office        Department's        average costs applicable           to air

                                          19
parcel  post and surface    mail. shipments,                  we estimated    tliet
annual savings   of about $57,000 shollld                   result    from the de-
pot's  new shipment  procedures.

         Navy and Air Force directives              are silent     with respect
to shipment       of supply parcels          to nearby installations.              All
but one of the Navy and Air Force installations                       covered by
our review,       however,      had established        local   procedures      for
shipping     high-priority        parcels      to nearby destinations         by
ordinary     surface       mail or by special        handling.      The procedure
at the San Antonio           Air Materiel       Area was to ship high-
priority     parcels       to nearby?     as well as distant,         domestic
destinations       by air parcel        post.      We noted,    however,    that
the volume of parcels            shipped     to nearby destinations         by the
San Antonio      Air Materiel        Area was small.

Recommendation

         We recommend that the Secretary            of Defense take action
to have revised         procedures     adopted at military      supply in-
stallations      to bring      about the shipping      of supply parcels
by the least       costly    mode of transportation        that will   permit
delivery      in the required       time.    These procedures     should en-
sure that all acceptable            means of delivery      are considered
by military      supply installations         before   the method of ship-
ping supply parcels          is selected.

DOD comments        and our      evaluation

       In a letter       dated May 27, 1970, the Deputy Assistant
Secretary      of Defense       (Installations           and Logistics)       commented
on a draft      of this report           and advised       us that DOD agreed
that military       supply      installations           should    ship parcel      post
packages     by the least         costly      modes of transportation            which
would permit       delivery       in the required           time,     The military
services     have reemphasized             their   policies       and procedures        re-
lating    to the use of the least                costly    modes consistent         with
the need to deliver           the supplies          to the consignee       by the re-
quired    delivery      date.

         The Assistant    Secretary   further    stated  that maximum use
would be made of available          space on QUICKTRANS and LOGAIR
aircraft      to ship supply parcels.         The San Antonio  Air Mate-
riel     Area has revised     its procedures     to comply with Air Force
policies.     This should minimize        the use of air parcel         post
for shipments     from that supply activity.             Also,   the Depart-
ment of the Army has issued         instructions       to its shipping       de-
pots to assure that local        procedures      provide     for considera-
tion of the use of QUICKTRANS and LOGAIR when these services
can meet military     requirements.

        The Assistant        Secretary     went on to state          that each of
the military        services    had either        reaffirmed       or instituted
procedures      to use MOM and special              handling     in lieu     of air
parcel    post whenever these services                 could meet the delivery
dates.     He indicated,         however,      that this      action    may not re-
sult    in as great an expansion             in the use of MOM between the
shipping     installations        and the military           mail gateways       as was
contemplated        in our draft       report,      because MOM parcels          move
as surface      mail in the domestic             system and this        fact may
dictate    the use of air parcel             post to the postal           gateways    in
order to meet delivery            dates.

        We believe,     however,    that the tests      which we conducted
 (see pp. 13 to 15) indicate           that the use of MOM in lieu of
air parcel      post can be greatly         expanded.      These tests    in-
cluded a comparison        of the number of days remaining             before
the required      delivery    of transportation        priority    2 parcels
with the maximum average transit              times for MOM shipments         to
overseas    destinations.        The criteria      used in this     comparison
took into consideration          the fact that MOM parcels          move as
surface    mail in the domestic          system.

        Despite    this,    we found that a high percentage        of the
parcels    selected      in our test could have been shipped          by a
less costly       method than air parcel       post and still     could have
been delivered        by the stipulated     delivery   date.    It is there-
fore our opinion         that DOD postal    costs for overseas       shipments
could be reduced         substantially   if greater    use is made of MOM
and other      less costly     modes of transportation       in lieu of air
parcel    post.




                                          21
                                     cI:A.PTER 3


                        -THE MAIL-MONITORING        PROGRAM

        The Department     of the Army operates        a mail-monitoring
program at the continental        United    States postal      gatewa;rs,
which resulted      in postal   cost reductions      in excess of
$17 million    during   the period     3~1;' 1964 through      December
1968 and in excess of $5.4 million           for fiscal    year 1969.

        The mail-monitoring           procedures      involve     changing     the
designated     mode of transportation            of official       mail,    includ-
ing parcels,      to the least        costly   mode by which the mail will
reach its overseas         destinations       within     delivery     require-
ments.     Under the Army program,            airmail      from Army, Air Force,
and other DOD activities--except               the Navy--is        monitored      to
determine     whether    it can be reduced to either               MOM or sur-
face transportation         and MOM is monitored             to ascertain
whether    surface    conveyance       would be appropriate.

         The mail-monitoring      program is conducted       at U.S. Army
military    mail terminals,     which are located       at the postal
gateways    in San Francisco,       California;   New York, N.Y.; and
Seattle,    Washington.      The Army Postal     Service   Agency is re-
sponsible     for monitoring    all DOD official      mail except mail
addressed     to Navy fleet    post offices,     which are also located
at the postal      gateways.

       The Navy has not established    a similar               program at the
postal  gateways to monitor   the mail addressed                to overseas
Navy activities.

SUBSTANTIAL SAVINGS POSSIBLE THROUGH
ESTABLISHMENT OF NAVY MAIL-MONITORING PROGRAM

         In our opinion,    savings       of approximately     $1.6 million
annually    might be realized      if     the Navy established     a mail-
monitoring     program.

        In view of the significance     of the savings      reported
by the Army, we inquired      at the fleet   post offices      in San
Francisco    and New York about the reasons why a similar            pro-
gram had not been adopted by the Navy.          Our inquiries
revealed      that the San Francisco              facility      had attempted          to
initiate      a mail-monitoring         program at that location                   in 1968.
Specifically,        we found that in Narch 1968 the officer                         in
charge of the San Francisco               facility         had recommended through
channels      to the Chief of Naval Operations                    that consider-
ation    be given to monitoring             the official          mail processed          at
that facility.          He   estimated      that     the    monitoring       program
could result       in reducing       transportation            costs by about
$400,000 annually           but would require             an increased       staff     of
13 additional        enlisted     men at a total            cost,    including       re-
lated    supplies     and equipment,          of $63,000.

        Initially,        the Commander Service            Force,      U.S. Pacific
Fleet,   while acknowledging            that the proposal           had merit     and
that it could result             in savings     in mail shipping           costs,   ex-
pressed     the view that a monitoring               operation       could result
in added delays and could create                  problems      that would negate
any dollar        savings     resulting     from reductions          in the costs
of shipping.          In addition,      this    activity      reported      that it
could not provide           the additional        personnel       needed to imple-
ment such a program.

         The Commander, Naval Supply Systems Command, and the
Chief of Naval Operations,              however,      reviewed   the proposal
favorably     in June 1968.          As a result,        in November 1968 the
Chief of Naval Operations              prepared     guidelines     for the im-
plementation         of a monitoring       system at the San Francisco
facility     and solicited        comments on the guidelines             from in-
terested     activities.        In transmitting          the guidelines       to
these activities,           Navy officials       stated,     in part,    that
prior    responses       from the commands had indicated              that:

         "The consensus     of the commands M* was concur-
         rence in principle      with the objective     of the pro-
         posed system of transporting       official    mail at the
         lowest  overall    cost consistent     with the require-
         ments of the users.

         "The feasibility       of providing    personnel   to im-
         plement    the monitoring      system on a six (6) month
         trial   basis at the Fleet Post Office,          San Fran-
         cisco   is being considered.         The implementation
         of the system on a U.S. Navy wide basis would
         depend on the results        of the tests."

                                             33
        SuLsequently)        the Coril;l.dnder Service    Force, U.S. Pa-
cific   Fleet,    which has responsibility            for the San Francisco
Fleet Post Office,         responded      to the proposed      guidelines      by
recommending      the establishment,          on a permanent      basis,    of
the mail-monitoring          system at the facility.           In a letter      to
the Chief of Naval Operations,               dated December 20, 1968, how-
ever,   it stated     that mail monitoring          would begin as soon as
the necessary       postal     clerk billets      were established        and
that no such billets           were available      within   their    command.
Consequently,       on May 9, 1969, the Chief of Naval Operations
advised    the Commander Service            Force that:

                 in light
         1 I J;.j+
                              of the stringent    manpower assets
         throughout       the Navy, implementation         of the
         subject    mail monitoring       system is held in abey-
         ance.     Should additional       manpower resources        be-
         come available        or the situation     dictates,     this
         entire    subject     will  be re-examinedotg

At the close         of our review,       the   status    of the    Navy's     pro-
gram remained         unchanged.

          Precise      computations       of the savings      that are possible
through      a mail-monitoring          program would require         information--
including        the volume of official           mail in pounds--not        pres-
ently     available       at the fleet      post offices      in San Francisco
and New York.            Theofficersin        charge of these activities,
however,       indicated      that downgrading        airmail    to MOM would be
possible.          The officer       in charge at the San Francisco            facil-
ity estimated          that 95 percent        of all official      airmail     par-
cels received          could be downgraded         to MOM.

         On the basis of this           estimate     and of our own limited
test    of what the average annual volume of mail in this                           cat-
egory could be, we estimated               that the monitoring            savings      at
the San Francisco         facility      would total      about $1.3 million
yearly.      In addition,         we estimated     that the savings             possible
at the New York facility,              which has a total         mail volume of
about one-fifth        that of the San Francisco              facility,         could
approximate     $265,000 yearly.             While we acknowledge             that
these estimates        cannot be considered           a precise         measurement
of the savings      available        through     a monitoring         program9 we do
believe    that they demonstrate             the significant          potential
savings    that are available           in this    area.
Recommendation

         We recommend that the Department            of the Navy recon-
sider    its position      and determine     whether     there are any ma-
jor obstacles       precluding    the establishment         of a mail-
monitoring     program at the postal         gateways,        In our opinion,
the relatively        small number of personnel          identified    by the
Navy as being needed for a monitoring              operation--l3       in San
Francisco,     seven in New York, and three            in Seattle--should
not preclude      the Department's       achieving     the savings     that
appear to exist        in this  area.

DOD comments

         In his comments of May 27, 1970, the Deputy Assistant
Secretary     of Defense (Installations          and Logistics)      advised
us that our proposal         that the Navy establish         a mail-
monitoring      system at the postal        gateways  had considerable
merit.     He indicated      that,   although    the Navy reported       that
it could not accomplish           the mail-monitoring      program within
its assigned       strength,    DOD was exploring     alternative      means
of providing       the program to the Navy.

OPPORTUNITY FOR INCREASED SAVINGS
IN ARMY'S MAIL-MONITORING PROGRAM

        The Army9 through          its mail-monitoring          program,     has
achieved    substantial       savings     for DOD. As previously             indi-
cated,   the Army reported           that in fiscal       year 1969 its moni-
toring   operations       resulted      in reduced transportation            ex-
penses in excess of $5.4 million,                   One of the factors         that
has enabled      the Army to achieve          this    degree of success has
been its ability        to identify       essential     delivery      dates.
This information        is mandatory        in determining       whether     an
item can be safely          downgraded.

         Army activities     are required      by regulation     to show a
delivery    date on all official       airmail     and MOM parcels      in-
troduced     into the military     postal    system,      Army regulations
also provide      that,  when no delivery       date is shown on par-
cels mailed      between Army activities,        such mail be shipped
by surface      means.



                                         25
      i   .-




            A cc;:!:.iderable       volume of the mail monitored                   by the
Army military            mail terminals           is non-Army-originated              mail
which is not subject                to Army regulations               and requirements.
For example,           in fiscal       year 1969 available              data indicated
that 78 percent             of the airmail           and 48 percent         of MOM moni-
tored by the terminals                  represented        mail from the Air Force?
fJ'r_jl"L DOD activities,             and other Government              agencies.        Dur-
 ; 1-jcq our review we observed               that     substantial       portions      of
thys mail had not contained                     either      delivery     dates or equiv-
client information              which could be used at the terminals                       to
maximize       the savings          attainable         through      the monitoring         op-
erart'*on.       The commanding officer                  of the New York Mail Ter-
minal told us that the omission                        of delivery       dates by non-
Army r:%ivit%es            which originated              MOM had seriously          limited
the termina        l's    ability      to maximize          savings.      At   this    loca-
tion we noted that approximately                         40 percent      of MQM had not
shown delivery            dates.

        Similarly,     our test of 375 MOM parcels      not downgraded
by the San Francisco       Military   Mail Terminal   revealed      that
52 percent      had not shown delivery     dates or the basis for
computing     them, which precluded     any downgrading     action.

Recommendation

        We recommend that the Secretary                    of Defense issue pol-
icy guidance,       similar     to that of the A-r-my, that would re-
quire   all military        services      and other Government             activities
using the military          postal     system to mark supply parcels
with delivery       dates or similar           information.          We estimate
that the lack of this            information        could be costing          DOD
about $934,000 annually             in unnecessary          shipping     costs.        We
further    recommend that any guidance                 issued provide,          as do
the Army regulations,           that    the    absence      of  a  delivery        date
on any parcel       automatically         results     inits     downgrading         to
surface    transportation.

DOD comments        and our      evaluation

      The Deputy Assistant       Secretary   of Defense,      commenting
on a draft  of this  report,     advised   us that DOD did not
agree that its regulations       should be revised      to provide     for
the showing of delivery      dates on parcel-post-sized         packages
of supplies  which enter the military        postal    system.    He
explained       that the military       supply    system was customer
(requisitioner)        oriented     and that the customer          established
his urgency        of need by selecting        the proper     priority        for
his requisition.           Since the customer-designated             priority       is
the base against        which the whole supply          system reacts,            DOD
does not consider          it practical     or desirable      to alter        the
entire      system to effect      a minor adjustment        in one segment
of the delivery        process.

         We discussed         the Deputy Assistant           Secretary's       response
with an official          in his organization            and were advised         that
his response       had been influenced             primarily     by comments that
he had received         from the Department            of the Air Force.
Therefore       we discussed         the matter     with Air Force officials
and pointed       out that our proposal             would not alter         the sup-
ply system or the criteria                 for establishing        supply and
transportation        priorities.            Our recommendation        merely would
require      the supplier        to mark each parcel          with the delivery
date which was established                 by the requisitioner          so that
personnel       at the gateways would have the option                    to select
the most economical             mode of transportation           for the overseas
portion      of the shipment           that would still       permit     receipt
within     the priority         delivery      commitment.

       Air Force officials        agreed that this additional       step
would not alter     the supply     system.   They felt,   however,
that it was unnecessary        because the information     required     by
Air Force regulations        to be marked on these types of par-
cels was sufficient       for personnel    at the gateways    to deter-
mine a delivery     date.

         In spite     of Air Force regulations,              we found that the
information       was not being marked on the parcels                  in all   cases.
For example,        of the 375 MOM parcels           which could not be
downgraded       by the San Francisco         Military       Mail Terminal,
196--or      52 percent--     did not show sufficient            information     to
compute a delivery           date.     Of that amount,        98 were parcels
mailed     from various       Air Force installations.               In our opin-
ion, the lack of this            type of information          prevents     personnel
at the postal        gateways      from achieving        the maximum savings
possible      through     the mail-monitoring          programs.

       We therefore   believe    that the             Air Force      should,   as a
minimum,  reemphasize     its regulation              requiring      all parcels

                                           27
    5,G te ;.larKcd with   information       l'rom which a delivery  date
    CG-L be computed.      To be consistent        and to facilitate   the
    mail-monitoring     program,     however,     we recommend that the Sec-
    retary    of Defense revise      DOD's instructions      with the intent
    oi having al.1 users of the military            postal  system mark sup-
    ply parcels with delivery          dates.




i




                                      28
                                       CHAPTER 4

                                   SCOPE OF REVIEW

        We reviewed    the instructions,         policies,     and practices
relating     to the shipment       of supply parcels         by air parcel
post and by certain         other transportation           modes.   We also
reviewed     pertinent    records     relating    to the shipment         of sup-
plies    and interviewed       responsible     transportation       officials.

        Our review      involved    a determination        of whether      shipments
made by air parcel          post could have been made in the required
time by other        less costly      transportation       modes.     It was di-
rected     toward those transportation              areas in which deficien-
cies were identified           by us during        prior  assignments     and to-
ward air parcel         post shipments       which appeared       to warrant
particular      attention      as our work progressed.,           Our examina-
tion did not include           a review of the validity           of priorities
assigned      to supply requisitions,

         Our review       was performed       at the    following      supply    in-
stallations,

        Department    of the Army:
             Atlanta   Army Depot, Atlanta,         Georgia
             Anniston   Army Depot, Anniston,         Alabama
        Department    of the Navy:
             Naval Supply Center,       Charleston,       South Carolina
             Naval Supply Center,       Oakland,     California
        Department    of the Air Force:
             San Antonio    Air Materiel     Area, Kelly        Air Force
                Base9 Texas
             Sacramento    Air Materiel     Area, McClellan         Air Force
                Base, California
             Warner Robins Air Materiel          Area, Robins Air Force
                Base, Georgia

Some work         was also done at the Army and Air Force post of-
fices     and     the fleet   post offices       in New York and San Fran-
cisco;      the     Navy Transportation      Coordinating       Office,     Alameda,
California;          the Army Postal     Service    Headquarters,        Washington,
D.C.; the         Air Force Postal      and Courier      Service,      Springfield,
Virginia;         the Naval Supply Systems Command, Washington,                     D.C.;


                                             29
the Air Force Logistics       Command, Wright-Patterson      Air Force
Base, Ohio;  the   Post  Office   Department,    Washington,    D,C.;
and the Department     of Defense,   Washington,     D.C.




                                  30
APPENDIXES




  31
                                                                                                                  APPENDIX           I
                                                                                                                          Page 1




                                                                                                       27   MAY      1970
                TS
lNSTALLA?lONS        AND   LOGISTICS




                Mr.     C. M. Bailey
                Director,    Defense    Division
                U. S. General      Accounting                Office
                Washington,      D. C.     20548

                Dear         Mr.        Bailey:

                This      is in response      to your   letter    of March    30, 1970 to the Secretary
                of Defense       which   forwarded       copies     of your  draft report  to the Congress
                entitled,      “Savings    Available      Through      Use of Air  Parcel   Post  Shipments
                by the Department           of Defense,      ” Code 87611 (OSD Case 3104).

                The Department               of Defense         concurs      with the recommendation                  that
                military      supply       installations          ship parcel       post packages        by the least
                costly     mode     of transportation               which    will   permit      delivery   in the
                required      time.         The Military            Services      have     reemphasized         their
                policies     and procedures               relating      to the use of the least          costly       mode
                consistent       with     the need to deliver              the supplies        to the consignee           by
                the required         delivery         date.

                Maximum           use will      be made      of available      space   on QUICKTRANS             and
                LOGALR         aircraft       to ship supply       parcels.       The local    procedures        at the
                San Antonio          Air    Materiel      Area    have been revised         to comply      with    Air
                Force      policies        and thus minimize           use of air parcel      post for shipments
                from     that Air        Materiel      Area    (AMA).       The Army      has issued      instructions
                to its shipping           depots     to assure     that local    procedures       provide     for con-
                sideration         of the use of QUICKTRANS                 and LOGAIR        when these        services
                can        meet        military   requirements.

                Each     of the Military          Services      have either            reaffirmed        or instituted          pro-
                cedures       to use Military          Ordinary       Mail     (MOM)           and special       handling         mail
                in lieu    of APP         whenever       these   services         will     meet     the required         delivery
                dates.      It is pointed         out, however,         that the use of MOM                   between       the
                shipping       installation       and the military           mail       gateways       may not expand              as
                greatly     as contemplated             in the draft       report        because       MOM       parcels       nlove
                as surface         mail     in the domestic        system         and this        fact may       dictate     tile
                use of APP          to the postal        gate ways     in order           to meet      delivery       dates.

                                                                        33
     APPENDIX I
            Page      2

     The proposal          that the Department        of the Navy       establish      a mail   moni-
     toring    system       at the postal  gateways        is recognized         as having    con-
     siderable      merit.      However,    the Navy        reports    that it cannot      accomplish
     the mail     monitoring       program     within    its assigned        strength.      The
I#   Department        of Defense         is     exploring   alternate        means      of providing        the
II
     mail   monitoring      service            for the Navy.

     This    Department         does     not agree    that      MILSTRIP          should be revised     to
     provide    for the       showing      of a Required         Delivery        Date (RDD)   on parcel
     post-sized          packages       of supplies        which     enter     the military       postal    system.
     MILSTRIP            is a customer         oriented        system      in which      the customer
      (requisitioner)          establishes        his urgency         of need by selecting            the proper
     priority        for his requisition.             Inasmuch        as the customer           designated
     urgency         of need is the base against                which     the whole       supply    system
     reacts,        it is not considered            practical       or desirable        to alter    the entire
     system        to effect     a minor      adjustment          in one segment           of the delivery
     process.           The overall        advantages         which     result    from      the retention      of
     the customer            established       urgency        of need within         the MILSTRIP          system
     outweigh         the relatively        small      advantage       that would       be gained       by estab-
     lishing      an RDD requirement                 for those      packages        of supplies      which    are
     suitable        for moving        by parcel       post.

     We wish    to express     appreciation      for the opportunity                    to comment     on
     the report     and consider     that the report     will   assist                in the improvement
     of the overall     management        of Defense   transportation.

                                                           Sincerely,




                                                                      Ghm.n 7. Gibson
                                                      Depuiy    Assistant   Secretary          of Defense




                                                           34
                                                  APPENDIX II
                                                      Page 1

                  PRINCIPAL OFFICIALS OF

               THE DEPARTMENTOF DEFENSEAND

     THE DEPARTMENTS
                   OF THE ARMY, NAVY, AND AIR FORCE

     RESPONSIBLEFOR THE ADMINISTRATION OF ACTIVITIES

                 DISCUSSEDIN THIS REPORT


                                      Tenure of office
                                      From            To
                                                      -
                   DEPARTMENTOF DEFENSE

SECRETARYOF DEFENSE:
   Melvin R. Laird                 Jan.    1969    Present
   Clark M. Clifford               Mar.    1968    Jan.    1969

DEPUTYSECRETARYOF DEFENSE:
   David M. Packard                Jan.    1969    Present
   Paul H. Nitze                   July    1967    Jan.    1969

ASSISTANT SECRETARYOF DEFENSE
  (INSTALLATIONS AND LOGISTICS):
     Barry J. Schillito            Jan.    1969    Present
     Thomas D. Morris              Sept.   1967    Jan.    1969

                  DEPARTMENTOF THE ARMY
SECRETARYOF THE ARMY:
   Stanley R. Resor                July    1965    Present
UNDERSECRETARYOF THE ARMY:
   Thaddeus R. Beal                Feb.    1969    Present
   David E. McGiffert              July    1965    Feb. 1969
ASSISTANT SECRETARYOF THE ARMY
  (INSTALLATIONS AND LOGISTICS):
     J. Ronald Fox                 June    1969    Present
     Robert A. Brooks              Oct.    1965    June 1969


                              35
                                           Tenure    of cffice
                                           From                      To
                                                                     -
                  DEPARTMENT OF THE NAVY

SECRETARY OF THE NAVY:
    John H. Chafee                  Jan.      1969      Present
    Paul R. Ignatius                Aug.      1967      Jan.    1969

UNDER SECRETARY OF THE NAVY:
    John W. Warner                  Feb.      1969      Present
    Charles F. Baird                July      1967      Jan.    1969

ASSISTANT SECRETARY OF THE NAVY
  (INSTALLATIONS AND LOGISTICS):
     Frank Sanders                  Feb.      1969      Present
     Barry J. Shillito              Apr.      1968      Feb.    1969


                DEPARTMENT OF THE AIR FORCE

SECRETARY OF THE AIR FORCE:
    Robert C. Seamans, Jr.          Jan.      1969      Present
    Harold Brown                    Oct.      1965      Jan.    1969

UNDER SECRETARY OF THE AIR FORCE:
    John L. McLucas                 Feb.      1969      Present
    Townsend Hoopes                 Septa     1967      Feb.    1969

ASSISTANT SECRETARY OF T'HE
  AIR FORCE (INSTALLATIONS
  AND LOGISTICS):
     Philip N. Whittaker            May       1969      Present
     Robert H. Charles              Nov.      1963      May     1969




                                                        U.S.   GAO    Wash.,   D.C.


                               36