Express Consignment Operators and USPS Work with CBP to Inspect Inbound International Items, but USPS’s Pilot Programs Lack Assessment Plans

		Express Consignment Operators Work with CBP to Screen Inbound International Items

Express consignment operators accept items for delivery to the United  States at points of sale in foreign countries and maintain control of items  until they are delivered to addressees in the United States. However, as of  February 2017, CBP officials involved in the pilot did not agree that it was  ready for expansion based on USPS’s frequent inability to provide  targeted mail to CBP for inspection. Because USPS and CBP have not agreed to specific performance goals  or targets, it is difficult to make well-informed decisions regarding the  possible expansion of these pilots in the future. USPS and CBP Have Not Evaluated Relative Costs and Benefits of Increased Use of Electronic Advance Data

According to USPS and CBP officials, increasing the use of EAD to target  mail for inspection may have benefits, such as reducing the volume of  inspected mail and increasing the percentage of inspections that result in  identification of a threatening or illegal item. Regarding the costs of collecting EAD, USPS has not calculated the  current costs of collecting EAD from countries with which USPS has data- sharing agreements, but USPS officials stated that USPS does not incur  significant additional costs for each new designated postal operator or  type of mail for which USPS begins collecting EAD. While some of the  costs of obtaining EAD may be borne by designated postal operators in  other countries, rather than directly by USPS, costs to USPS to use EAD  to target mail for inspection may include:
Equipment and personnel required to identify targeted mail (such as  equipment required to sort through hundreds of pieces of mail to  identify a single piece of mail): For example, USPS estimated that the  cost for software upgrades needed for Pilots 1 and 2 (currently the  only efforts USPS and CBP have underway to use EAD to target mail  for inspection) to identify individual pieces of mail within larger sacks  was about $150,000. Although CBP has been using EAD to target express cargo for inspection  since approximately 2004, it has not evaluated whether this method  results in benefits relative to other methods of choosing express cargo, or  cargo more generally, for inspection. As USPS and CBP contemplate the expansion of pilot programs to other  ISCs and types of mail, existing pilots could be used as an opportunity for  CBP and USPS: (1) to articulate performance goals for the pilots, (2) to  collect data and assess the pilots on their success in enabling USPS to  provide targeted mail to CBP for inspection, and (3) to assess the costs  and benefits of various methods of choosing mail for inspection. Postal Service and  Departments of State and Homeland Security for review and comment. GAO staff making key contributions to this report are  listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

In this report, we address (1) types of items CBP has seized from mail  and express cargo sent to the United States; (2) how inbound  international items are inspected as they arrive in the United States; and  (3) options to collect electronic advance data for mail and the costs and  benefits of using electronic advance data for targeting mail for inspection. We conducted site visits to all five USPS  International Service Centers (ISC)—the facilities at which USPS receives  the majority of inbound international mail to interview officials, observe the  CBP inspection process, and identify associated challenges. We  interviewed officials from USPS, CBP’s Office of Field Operations and  National Targeting Center, and the Transportation Security Administration  (TSA) and representatives from the three largest express consignment  operators (based on CBP cargo volume data for fiscal year 2015): UPS,  FedEx, and DHL. USPS is required to present all inbound international  mail, with some exceptions, to U.S. Customs and Border Protection  (CBP) for inspection. U.S. While USPIS does not have primary  responsibility for inspecting inbound international mail, it coordinates with  USPS and U.S. Customs and Border Protection to facilitate the inspection  of inbound international mail.
Why GAO Did This Study

Expanding international use of e-commerce has increased the volume of global trade, potentially increasing threats sent to the United States via international mail and express cargo. Some in Congress have called for additional measures to identify prohibited items, such as increased collection of EAD that may provide CBP with information to better focus its screening efforts by targeting mail for inspection. GAO was asked to review the security of inbound international mail.
In this report, GAO addresses, among other objectives, (1) how inbound international items are inspected as they arrive in the United States; and (2) what options exist to collect EAD and the costs and benefits of using it to target mail for inspection. GAO reviewed documentation and interviewed officials from CBP, USPS, the U.S. Department of State, and, based on 2015 inbound international volume, the three largest express consignment operators. GAO also conducted site visits to all of USPS's International Service Centers and two express consignment operators' facilities, to observe screening operations and interview officials.

What GAO Found

Express consignment operators (like FedEx and DHL) and the U.S. Postal Service (USPS) work with U.S. Customs and Border Protection to inspect inbound international express cargo and mail. Express consignment operators are required to provide “electronic advance data” (EAD)—such as the shipper's and recipient's name and address—for all inbound express cargo. U.S. Customs and Border Protection (CBP) uses this information to target inspections. USPS is not required to provide this information to CBP. Nonetheless, as of March 2017, advance data are unavailable for roughly half of inbound international mail. Although USPS and CBP have two pilot programs under way to target mail for inspection based on EAD, they have not established specific and measureable goals and therefore lack the performance targets needed to evaluate the effectiveness of the pilots. Without these performance targets, USPS and CBP are unable to make well-informed decisions about the possible expansion of these pilots in the future. While USPS officials reported in November of 2016 that they planned to expand one of the pilots, CBP officials stated that the pilot was not ready for expansion because of USPS's inability to provide 100 percent of targeted mail to CBP for inspection. USPS stated that it is working to address challenges related to identifying targeted mail within sacks containing hundreds of individual pieces of mail (see figure).
Options for collecting EAD include negotiating agreements with foreign postal operators and legally requiring EAD, but the costs and benefits of using EAD to target mail for inspection are unclear. USPS and CBP officials stated that having EAD to target mail for inspection could result in saving time and resources and increase the percentage of inspections that identify threatening items. However, USPS has not calculated the cost of collecting EAD from countries with which it has data-sharing agreements, and neither USPS nor CBP has collected the necessary information to determine the extent to which the use of EAD would provide benefits relative to current methods of choosing mail for inspection. For example, CBP has collected data on the rate of seizures per inspection for current pilot programs, but it has not collected comparable data for other screening methods it uses to target mail for inspection. As such, USPS and CBP risk spending resources on efforts that may not increase the security of inbound international mail or that may not result in sufficient improvement to justify the costs.

What GAO Recommends

GAO recommends that CBP, in coordination with USPS: (1) establish measureable performance goals to assess pilot programs and (2) evaluate the costs and benefits of using EAD to target mail for inspection compared with other targeting methods. CBP and USPS agreed with these recommendations.