International Mail Security: CBP and USPS Should Assess Costs and Benefits of Using Electronic Advance Data

This testimony summarizes information contained in GAO's August 2017 report, entitled International Mail Security: Costs and Benefits of Using Electronic Data to Screen Mail Need to Be Assessed ( GAO-17-606 ).

U.S. Customs and Border Protection (CBP) is the primary federal agency tasked with targeting and inspecting inbound international items and seizing illegal goods, including illegal or inadmissible drugs and merchandise. As mail and express cargo arrive in the United States, both the U.S. Postal Service (USPS) and express consignment operators (such as FedEx and DHL) provide items to CBP for inspection. However, unlike express consignment operators, USPS is not currently required to provide CBP with electronic advance data (EAD), such as the shipper's and recipient's name and address, for inbound international mail and does not have control over mail prior to its arrival in the United States. Thus, USPS relies on foreign postal operators to collect and provide EAD voluntarily or by mutual agreement.

In 2014 and 2015, USPS and CBP initiated two pilot programs at the New York International Service Center (ISC) to target certain mail for inspection using some of the EAD obtained under data-sharing agreements with foreign postal operators. Under the pilots, CBP uses EAD to target a small number of pieces of mail each day. According to USPS officials, when USPS employees scan either individual targeted pieces or larger sacks containing this targeted mail, they are alerted that CBP has targeted the item and set the item or sack aside for inspection. According to USPS and CBP, USPS has been unable to provide some targeted mail for inspection because locating targeted mail once it arrives at an ISC has been a challenge. Since the pilots began, USPS has provided CBP with about 82 percent of targeted mail for one pilot, and about 58 percent of targeted mail for the other. However, while USPS and CBP have collected some performance information for these pilots (including the percentage of targeted mail provided for inspection), this information is not linked to a specific performance target agreed upon by USPS and CBP--such as a specific percentage of targeted mail provided to CBP for inspection. Further, the agencies have not conducted an analysis to determine if the pilot programs are achieving desired outcomes. Because CBP and USPS lack clear performance goals for these pilots, they risk spending additional time and resources expanding them prior to fully assessing the pilots' success or failure.

In our report we found that the costs and benefits of using EAD to target mail for inspection are unclear. For example, according to USPS and CBP officials, increasing the use of EAD to target mail for inspection may have benefits, such as reducing time and resources needed for the screening process--potentially decreasing costs--and may increase the security of inbound mail. However, the costs of collecting and implementing the use of EAD are not yet known, and neither USPS nor CPB currently collect the data necessary to know whether using EAD might increase the security of inbound mail or decrease the time and costs associated with screening. For example, CBP has collected data on the percentage of inspections resulting in a seizure for mail inspected as a result of targeting in the pilot programs at the New York ISC. However, CBP does not collect comparable data for seizures resulting from inspections conducted based on current methods of choosing mail for inspection. In light of the challenges that collecting and using these data present, it is important that CBP and USPS carefully consider actions to enhance inbound international mail security to avoid wasting time and money on potentially ineffective and costly endeavors.

In our report, we recommended 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 and CBP plans to implement them by February 28, 2018.

Thank you for the opportunity to discuss our August 2017 report on  international mail security, which we are publicly releasing today. The  expanding international use of e-commerce and the ease and expediency  of cross-border transactions have resulted in a much higher volume of  global trade, as consumers may be importing goods when they make  purchases over the Internet. This expansion could increase the potential  for threats to national security, in addition to public health and safety,  because international mail and express cargo can be used to send illegal  or otherwise prohibited items to the United States. For example, there has  been a recent increase in deaths in the United States related to the  synthetic opioid fentanyl, a controlled substance, which could arrive in the  United States in international mail or express cargo.

The U.S. Postal Service (USPS) and express consignment operators— such as FedEx, DHL, and the United Parcel Service (UPS) —play key  roles handling inbound international items. U.S. Customs and Border  Protection (CBP), within the Department of Homeland Security, also has  a critical role as the primary federal agency tasked with targeting and  inspecting suspicious inbound international items and seizing illegal  goods entering the country. Some members of Congress and others have  called for additional security efforts related to inbound international mail,  such as increasing the collection of electronic advance data (EAD) that  may provide CBP with information to better focus its targeting and  inspection efforts. These data include the sender’s name and address,  recipient’s name and address, contents’ description, number of pieces,  and total weight.

My remarks today are based on our report, which addressed (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 EAD for mail and the costs  and benefits of using these data to target mail for inspection. For the  purposes of this statement, I will focus primarily on our findings related to  USPS’s and CBP’s efforts to obtain and use EAD to target mail for  inspection. Specific details that are related to the screening process and  foreign postal operators and that CBP and USPS considered sensitive  are not included in our report or this statement.

For our report, we reviewed and analyzed data on seizures of mail and  express cargo items as documented in CBP’s Seized Asset and Case  Tracking System (SEACATS). We reviewed applicable laws and  regulations; USPS and CBP guidance; USPS Office of Inspector  General’s reports; international mail agreements, including requirements  set by the Universal Postal Union (UPU) and agreements for EAD with  foreign postal operators; and proposed federal legislation. We interviewed  officials from USPS, the Department of State, CBP, 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.

We reviewed available information related to pilot programs conducted by  USPS and CBP using EAD to target mail for inspection for the period  from July 2014 through January 2017 (the time period for which data  were available). We compared available documentation on the goals and  performance of the pilots to federal internal control standards related to  defining program goals. We did not assess the effectiveness of CBP’s  screening efforts for inbound international express cargo or mail because  that was outside the scope of our review. To assess USPS’s and CBP’s  efforts to collect and implement EAD, we compared these efforts to GAO guidance on program evaluation. Further details on our scope and  methodology are included in our report. The work on which this statement  is based was conducted in accordance with generally accepted  government auditing standards.

In summary, we found that CBP seizes a variety of inbound items,  including drugs and merchandise, through inspections of express cargo  and mail as it arrives in the United States. However, CBP and USPS have  not established measureable goals for pilot programs to use EAD for  targeting mail for inspection, nor have they identified the potential costs  and benefits of using EAD. Given the challenges associated with  collecting and using EAD, CBP should, in coordination with USPS,  establish measureable goals for pilot programs and 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 and CBP plans to implement them by February 28,  2018.

CBP Seizes a Variety of Inbound Items That May Pose Threats to U.S. Safety and Security

In our report, we found that, according to data from CBP’s Seized Asset  and Case Tracking System (SEACATS), during fiscal years 2012 through  2016 CBP conducted about 308,000 seizures of inbound international  items that may pose a threat to U.S. security, health and safety, business,  and ecology. Of those, CBP seized about 70 percent from mail and 30  percent from express cargo. Seized items are categorized in SEACATS  as either drugs or merchandise. Among the approximately 308,000  seizures, illegal or inadmissible drugs accounted for about 47 percent of  total seizures and merchandise accounted for about 53 percent.

According to testimony by a U.S. Immigration and Customs Enforcement  official, a recent increase in deaths related to the synthetic opioid fentanyl  has resulted in an increased focus on identifying methods by which  traffickers bring fentanyl into the United States. In fiscal years 2012  through 2015, CBP’s seizure data reflect zero seizures of fentanyl, but  according to CBP, fentanyl seizures would have been captured under  other categories in SEACATS. According to CBP, a specific category  code for fentanyl was added to SEACATS in fiscal year 2016. SEACATS  reflects 53 seizures of fentanyl in fiscal year 2016 via both mail and  express cargo.

USPS’s and CBP’s Pilot Programs Lack Performance Targets

As mail and express cargo arrive in the United States, both USPS and  express consignment operators provide items to CBP for inspection.  Express consignment operators accept items for delivery to the United  States at points of sale in foreign countries and provide EAD to CBP prior  to the items’ scheduled arrival in the United States. CBP then analyzes  the EAD and provides lists of targeted items to express consignment  operators. However, unlike express consignment operators, USPS is not  currently required to provide CBP with EAD for inbound international mail  and does not have control over mail prior to its arrival in the United  States. Thus, USPS relies on foreign postal operators to collect and  provide EAD voluntarily or by mutual agreement. According to USPS  data, USPS received EAD for about one third of all inbound international  mail (excluding letters, flats, and military/diplomatic mail) for the period  from April 2016 through March 2017. For the month of March 2017 (the  most recent data available at the time of our review), USPS data indicate  that EAD was available for roughly half of all inbound international mail  (excluding letters, flats, and military/diplomatic mail).

In 2014 and 2015, USPS and CBP initiated two pilot programs at the New  York International Service Center (ISC) to target certain mail for  inspection using some of the EAD obtained under data-sharing  agreements with foreign postal operators. At the time of our review, CBP  did not use EAD to target mail for inspection outside of these pilots.  According to USPS documents, the goal of these pilots is to test the  effectiveness of placing holds on mail that has been targeted by CBP  based on EAD. Under the pilots, CBP uses EAD to target a small number  of pieces of mail each day. According to USPS officials, when USPS  employees scan either individual targeted pieces or larger sacks  containing this targeted mail, they are alerted that CBP has targeted the  item and set the item or sack aside for inspection. Since the pilots began,  USPS has made efforts to locate and provide CBP with the targeted mail  and CBP has collected performance data on the percentage of targeted  mail USPS has provided for inspection: about 82 percent for one pilot,  and about 58 percent for the other.

In our report we note that, according to USPS and CBP, USPS has been  unable to provide some targeted mail for inspection because locating  targeted mail once it arrives at an ISC has been a challenge. Specifically,  USPS ISCs may receive thousands of large sacks of mail per day that are  scanned as they are accepted. Each sack may contain hundreds of  pieces of mail that are not individually scanned upon arrival. As a result,  locating a targeted item requires manually sorting through the entire sack,  and USPS employees may overlook the item while sorting through the  larger sack to locate targeted mail. According to USPS officials, at the  time of our review they were testing an automated method to identify  targeted mail within these larger sacks.

Standards for internal control in the federal government state that defining  program goals in specific and measurable terms allows for the  assessment of performance toward achieving objectives. However,  while USPS and CBP have collected some performance information for  these pilots (including the percentage of targeted mail provided for  inspection), this information is not linked to a specific performance target  agreed upon by USPS and CBP—such as a specific percentage of  targeted mail provided to CBP for inspection. Further, the agencies have  not conducted an analysis to determine if the pilot programs are achieving  desired outcomes.

In our report, we concluded that, because CBP and USPS lack clear  performance goals for these pilots, they risk spending additional time and  resources expanding them prior to fully assessing the pilots’ success or  failure. As such, we recommended that CBP, in conjunction with USPS,  (1) establish measureable performance goals for pilot programs and (2)  assess the performance of the pilots in achieving these goals. The  Department of Homeland Security concurred with this recommendation  and plans to implement it by February 28, 2018.

USPS and CBP Have Not Evaluated Relative Costs and Benefits of Increased Use of Electronic Advance Data

In our report we found that the costs and benefits of using EAD to target  mail for inspection are unclear. For example, 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. This potential outcome could decrease time  and resources needed for the screening process—potentially decreasing  costs—and may increase the security of inbound mail. However, the  costs of collecting and implementing the use of EAD are not yet known,  and neither USPS nor CPB currently collect the data necessary to know  whether using EAD might increase the security of inbound mail or  decrease the time and costs associated with screening.

Specifically, regarding the costs of collecting EAD, USPS has not  calculated the current costs of collecting EAD from countries with which it  has data-sharing agreements, but officials stated that USPS does not  incur significant additional costs for each new designated postal operator  or type of mail for which it 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), and  software upgrades required to exchange data with foreign postal  operators and with CBP.

In our report we found that an analysis of the costs associated with  planned efforts is particularly critical given USPS’s financial challenges.

As we recently found, USPS reported a net loss of $5.6 billion in fiscal  year 2016—its 10th consecutive year of net losses. In light of this  situation, any expenditure of financial resources to make any additional  infrastructure and information technology upgrades necessary to  implement the use of EAD for targeting merit careful consideration.

Beyond costs, in our report we also determined that USPS and CBP have  not performed an analysis of the benefits of using EAD to target mail for  inspection, including the effectiveness of targeted inspection based on  EAD relative to other methods of selecting mail for inspection. Thus, the  extent to which targeting based on EAD might result in an increased  ability to identify threats or other benefits over current methods is  unknown. For example, CBP has collected data on the percentage of  inspections resulting in a seizure for mail inspected as a result of  targeting in the pilot programs at the New York ISC. However, CBP does  not collect comparable data for seizures resulting from inspections  conducted based on current methods of choosing mail for inspection.

Moreover, USPS and CBP experience challenges related to inspecting  mail that may limit their ability to effectively use EAD to target mail for  screening and, thus, to experience EAD’s possible benefits. For example,  USPS depends on foreign postal operators to make EAD available.  According to USPS and State Department officials, however, those  operators may not share the same security priorities as USPS and CBP  and may not make EAD available. If the amount of available EAD remains  limited for inbound mail, this may reduce the effectiveness of CBP’s  targeting efforts or could constrain CBP’s ability to reduce the volume of  mail it inspects.

Our prior work has found that in designing preventive measures—such as  the screening of inbound mail to identify potential threats—it is helpful to  conduct a thorough assessment of vulnerabilities as well as cost-benefit  analyses of alternative strategies. In the absence of information on the  relative costs of various methods of selecting mail for inspection as well  as their effectiveness at identifying potential threats in inbound mail,  USPS and CBP are unable to fully understand whether obtaining  additional EAD for targeting purposes will provide security or resource  benefits.

In our report, we therefore concluded that, particularly in light of the  challenges that collecting and using these data present, it is important  that CBP and USPS carefully consider actions to enhance inbound  international mail security to avoid wasting time and money on potentially  ineffective and costly endeavors. As such, we recommended that CBP, in  conjunction with USPS, evaluate the relative costs and benefits of  collecting EAD for targeting mail for inspection in comparison to other  methods. The Department of Homeland Security concurred with this  recommendation and plans to implement it by February 28, 2018.

In conclusion, existing pilots could be used as an opportunity for CBP and  USPS to: (1) articulate performance goals for the pilots, (2) collect data  and assess the pilots on their success in enabling USPS to provide  targeted mail to CBP for inspection, and (3) assess the costs and benefits  of various methods of choosing mail for inspection. We are encouraged  that USPS and the Department of Homeland Security agreed with our  findings and recommendations. Effective implementation of our  recommendations should help CBP and USPS ensure that efforts to  collect and use EAD to target mail for inspection achieve the desired  security and resource benefits.

Chairman Meadows, Ranking Member Connolly, and Members of the  Subcommittee, this concludes my prepared statement. I would be  pleased to respond to any questions that you may have at this time.

If you or your staff have any questions about this testimony, please  contact Lori Rectanus, Director, Physical Infrastructure Issues at (202)  512-2834 or rectanusl@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. GAO staff who made key contributions to this testimony  are Derrick Collins and Katie Hamer. Other staff who made contributions  to the report cited in this testimony are identified in the source product.

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