EDD/PASS CAN cause service failures. If a bad address comes down the belt and is scanned the system will guess and put the closest thing it can find on the label. If a driver ends up with that package in his 7000 or 8000 section but the correct address was for a business on a route 80 miles away then that is a service failure that can, and should, be blamed on the system. In no way, shape, or form is it a cop out.
Arrow:
I have personally looked at 1000's of these and what you say can happen but....
This happens rarely and is generally NOT how these "flips" occur.
When a customer sends a package without a valid address, the system will do its best to figure out what they meant. This pass is incredibly accurate. As you say, sometimes (rarely) it gets it wrong. It depends on the street number, zip, city, etc. that they send and if there are multiple choices.
If its ambiguous as in the case you mention (meaning that it could be one of two or more choices), the system does not guess. It sends it to a person to figure out. In the case of a package with PLD, this generally happens before the package gets to the preload. That "pre corrections" person may pick the wrong address. They are supposed to use other tools that help determine.
If the package was not sent with PLD, a data capture operator keys in the address.
The two biggest ways these flips happen is that these people pick or enter the wrong address.
The third way it generally happens is that someone put in an address alias incorrectly.
I realize that from a drivers perspective they all look the same and all have the same impact. In ALL cases however, the cause is not sending a "valid" address to UPS. If the shipper send a validated address, the system never makes a mistake (actually, I did see it happen once long, long ago but that was corrected).
P-Man