• on Feb 11th, 2013 in Mail Processing & Transportation | 7 comments

    The Postal Service is a leader among federal agencies in sustainability efforts. In 2009, it joined with 20 international postal operators to commit to a 20 percent reduction in carbon emissions by 2020, a goal it has made significant progress toward achieving. A major contributor to greenhouse gas emissions is vehicle emissions. With the largest civilian fleet in the country – more than 213,000 vehicles – the Postal Service has both an enormous opportunity and an enormous challenge in reducing its fuel consumption. So far, the challenges have proved considerable. In its most recent sustainability report for fiscal year 2011, the Postal Service reported that while it met its sustainability goals in six categories, it did not reach its target for reducing petroleum fuel consumption in its own vehicles or in those used by contractors. A growing number of delivery points each year and an aging vehicle fleet have made it difficult for the Postal Service to reduce its petroleum use. Although the Postal Service has worked diligently towards its goal of using alternative fuels, real gains in energy efficiency will be limited until it can overhaul the fleet. Unless the Postal Service’s financial situation improves or it finds alternative methods for capital investment, it is not likely to replace its existing fleet of vehicles. This raises questions about the limitations on the Postal Service’s ability to reduce its petroleum fuel use and how it can best leverage alternative fuel options. How should the Postal Service achieve its fuel consumption goals when its financial situation is so dire? Should it suspend some of its sustainability efforts while tackling its larger financial and business model challenges? The Sustainability Report indicates that sustainability efforts make financial sense, with savings from reduced fuel use and new revenue from recycling products. Could the savings and revenues be used creatively to fund new energy-savings projects?

  • 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?
  • on Jun 18th, 2010 in Mail Processing & Transportation | 41 comments
    The U.S. Postal Service’s current fleet of more than 219,000 vehicles includes approximately 146,000 delivery vehicles, most of which are long-life vehicles (LLVs). The first LLVs were produced in 1987, and they average about 10 miles per gallon. The vehicles are right-hand drive to accommodate drivers delivering numerous mailpieces to curbside mailboxes. These iconic right-hand drive delivery trucks are nearing the end of a 24-year life cycle and are costly to maintain. In a recent audit, we noted that it cost the Postal Service about $524 million to fix the LLVs in fiscal year 2009. More than 40,000 trucks required more than $3,500 each in maintenance and another 19,000 of these required an average of $5,600 in repairs consecutively in 2008 and 2009. At this rate, for the high maintenance segment of the fleet, repairs in the next eight years will cost $342 million more than it would to buy new trucks. Considering the growing costs of maintaining this unique but aging fleet, what are your thoughts on a cost-effective, but practical replacement delivery vehicle fleet? To read the full report go to http://www.uspsoig.gov/foia_files/DA-AR-10-005.pdf.
     
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