• on Aug 19th, 2013 in Mail Processing & Transportation | 10 comments

    Alternative fueled vehicles are gaining renewed interest with the abundance of cheap, domestic natural gas. Compressed natural gas (CNG) vehicles took off in the 1990s as infrastructure development surged. Service stations then declined for a decade but are now resurging. Liquefied natural gas and ethanol are other options, as is a new clean fuel called GDiesel, a combination of conventional diesel and natural gas that can be used on conventional diesel engines without modifications.

    With so many attractive options and an aging delivery fleet in need of an upgrade, the time seems ripe for the U.S. Postal Service to convert or retrofit its fleet. But a quick overhaul remains problematic given a significant hurdle: the Postal Service lacks capital to make a major investment. Another question is where the Postal Service should place its bets. Should it convert to an electric fleet or go with CNG or are the emerging hybrid technologies the way to go? Should it put all its eggs in one basket or should it convert parts of the fleet to different fuels? How does the Postal Service remain flexible enough to adapt to the best technology knowing that rapid innovation in the alternative fuel sector means the next best thing could be right around the corner?

    The Postal Service has set a target of increasing alternative fuel use in postal vehicles by 10 percent annually through 2015. It also has goals for reducing postal-vehicle petroleum use and contract transportation petroleum use by 20 percent annually in that time. In its 2012 Sustainability Report, the Postal Service notes that it continues to take proactive steps to increase the use of alternative fuels. It is testing many types of alternative fuels, including fuel cell vehicle, electric long-life vehicles, and new hybrid technologies. “Providing affordable delivery service requires our use of alternate fuels that are conveniently available and competitively priced,” the Postal Service said in the report.

    Converting or retrofitting the fleet to an alternative fuel has to make sense financially and logistically based on how the Postal Service operates. Lower fuel costs make the financial benefits of alternative fuels easier to justify. Their environmental benefits are well documented. But logistics remain an issue. If refueling stations are not conveniently or strategically located, the Postal Service has to travel further from its routes. This can affect service and costs.

    Share your thoughts on the best strategy for an alternative fuel fleet. Should the Postal Service throw in with one type of fuel or continue experimenting with a number of options? Should it set more aggressive goals for reducing its use of petroleum and increasing its alternative fuel use? Or does its financial situation limit its ability to move aggressively in those areas?

  • on Oct 29th, 2012 in Mail Processing & Transportation | 7 comments
    With so much technology at their fingertips, customers now want and expect complete visibility of their mail, from entry to delivery. The Intelligent Mail barcode (IMb) program has helped to bring total visibility closer to reality, and other technologies, such as radio frequency identification (RFID) and global positioning system (GPS) tracking, can fill the gaps. Complete visibility of mail provides real-time information about mail to customers and the U.S. Postal Service, including service performance data. This visibility into mailing activities allows the Postal Service to better manage its operations, increase route efficiency, improve service, and control costs. Mail visibility gives customers insight into mailing activities and provides them analytics to drive business decisions. As the IMb program matures and more customers adopt the full service offering, the Postal Service gets closer to total visibility of mail. But gaps in end-to-end visibility still exist, such as when mail travels on contracted highway route transportation and it is no longer “communicating” its location. One solution is to use GPS on HCR trucks to have visibility of mail during transport. In November 2010, the Postal Service initiated a limited-scope GPS program on about 900 of its 15,500 commercially contracted highway transportation routes, which covers about 300 highway contract route (HCR) suppliers. The suppliers were supposed to provide certain GPS tracking information every 30 minutes while hauling mail, including location of the vehicle. However, a recent OIG audit found that this GPS program was capturing only limited data, primarily because suppliers were not consistently reporting the data to the Postal Service. Limited data resulted in reports that were not useful for managing highway transportation routes. Still, the audit found enormous potential in this GPS program. If the Postal Service expanded it and data were captured and reported properly, it would provide the Postal Service with actionable reports that could include enhanced data analytics, real-time alerts, and fuel analysis and route optimization information. GPS data-based reports could be indicators of efficiency improvements, as well as potentially fraudulent activity. Further, the Postal Service could integrate this GPS program with its other mail visibility technologies, such as IMb and the surface visibility program, to enhance total mail visibility, which the Postal Service has cited as a priority and “essential to transforming the business.” The key, however, would be to ensure adequate supplier compliance. Further, integration of the various visibility programs would have to be seamless and cost-effective. What would be the best way to integrate the various visibility technologies? Would extending the GPS program to more surface transportation routes be a logical next step? Are there other technologies that should be considered to close some of the visibility gaps?
  • on Aug 27th, 2012 in Mail Processing & Transportation | 18 comments
    The U.S. Postal Service owns more than 213,000 vehicles, the largest civilian fleet in the world. Many of these vehicles are reaching the end of their operational lives, prompting the Postal Service to wrestle with how best to address its long-term vehicle needs. A recent Government Accountability Office report noted that the organization’s current financial situation poses a significant barrier to vehicle replacement or refurbishment. Attention has primarily been given to the Postal Service’s delivery fleet of left-hand drive trucks and minivans, which make up almost 85 percent of its entire fleet. However, the Postal Service also operates a large fleet of tractor trailers to haul mail from one processing facility to another or to stations and branches. Many of these trucks have exceeded their usage expectancy. The Postal Service has about 1,800 tractors and almost 3,900 trailers. The trailers come in various sizes to accommodate different-sized docks and to navigate various locations. Some locations, such as New York City, cannot accommodate the larger 53-foot trailers. It would cost roughly $135,000 to replace each tractor and another $45,000 to replace a standard-sized trailer. Trailer specifications are unique to the Postal Service, making “off the shelf” purchases impossible. In addition, the Postal Service needs to refurbish the tractors to meet the emissions standards in each state. These standards and the deadlines for achieving them vary by state. The cost to retrofit the existing fleet would vary depending on the standards needing to be met. With its current cash crunch, the Postal Service lacks the capital to invest immediately in upgrading its fleet. Yet an overhaul of the fleet of some kind is needed. Are there alternatives to replacing the fleet of tractor trailers? Could the Postal Service hire contractors to perform the work now done by its own fleet? Contracting out is the most common way the Postal Service acquires transportation. The Postal Service already contracts with 15,000 highway contract route (HCR) suppliers to cover more than 1.2 billion miles of mostly long-haul mail transportation. Or is contracting out not feasible given the Postal Service’s unique and varied needs for its tractor trailer fleet? Should the Postal Service lease new trailers and have Postal Service Vehicle drivers perform the work? Or, could the Postal Service consider new financing arrangements, such as taking a bank loan like a private transport company does, which would allow it to purchase trailers over time? Or does replacing the fleet all at once through a competitive bidding process provide the Postal Service with the strongest purchasing power? If so, how should the Postal Service pay for this replacement?

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