• 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 Jul 16th, 2012 in Mail Processing & Transportation | 2 comments
    The U.S. Postal Service has a long and storied history of moving mail on rail dating from the beginning of the railroad industry in the early 1800s. Mail was sorted on trains and Post Offices and processing facilities were located near rail stations. Many innovations and changes to rail, including the very development of modern freight rail service, were closely tied to the movement of mail. Today, however, the Postal Service meets its surface transportation needs almost entirely by using trucks owned by highway contractors. By contrast postal competitors and many others have taken advantage of the dramatic changes in the rail industry in recent years and greatly expanded their use of rail, realigning their networks with the nation’s railroads. The Office of Inspector General’s new paper Strategic Advantages of Moving Mail by Rail studied this rediscovered opportunity and found: • Shifting a portion of mail volume to rail without changing the overall transportation network could save $100 million per year. • If the Postal Service made an even greater commitment to rail, altering its network, it could realize even greater savings. • The use of intermodal rail can contribute significantly to reducing greenhouse gas emissions and meeting the Postal Service’s environmental goals. • Because of its lesser sensitivity to fuel price increases and greater control of its own infrastructure, rail transportation has major, long-term strategic advantages over highway. Rail transportation meets the needs of the Postal Service’s competitors and has become the industry standard for long distance surface transportation. Where the use of rail would allow it to meet service standards, should the Postal Service give it another try? Let us know what you think.
  • on Nov 7th, 2011 in Mail Processing & Transportation | 18 comments
    U.S. Postal Service Mail Transport Equipment (MTE) consists of specialized containers such as sacks, pouches, trays, hampers, over-the-road containers and pallets. Although the Postal Service does not maintain a perpetual inventory of its MTE, a 2010 audit indicated approximately 359 million pieces in the system of 400 processing facilities, over 30,000 post offices and thousands of mailers nationwide. Proper MTE management and availability ensure the safe, secure, and timely movement of mail between Postal Service facilities and its customers or contractors MTE may be used only to transport mail, and borrowers of MTE (such as private mailers) are responsible for its proper use and return. Unfortunately, this is not always the case. Over the past few years Postal Service has experienced a significant loss of plastic and wooden pallets. Since fiscal year 2005 the Postal Service has spent over $240 million on close to 19 million plastic and wooden pallets, many of which can no longer be accounted for internally or externally. Realizing the significant cost of leakage of MTE from its inventory, the Postal Service has studied both the movement of MTE as well as ways to reduce leakage. As a result of its precarious financial condition and a freeze on all information technology initiatives, two technological initiatives to better track MTE have been shelved. The Postal Inspection Service has been proactive in both reaching out to the public on this issue, and investigating MTE theft and misuse. The Inspection Service has an ongoing national MTE recovery initiative to locate misappropriated and misused MTE, especially pallets. What do you think about the MTE situation? Is there a cost-efficient way to track MTE? What else should the Postal Service do to reduce leakage? What are your experiences using plastic or wooden pallets? Give your comments below. And if you know of any pallets or other MTE being misused or taken from the system, contact the OIG Hotline, which accepts confidential and anonymous complaints. This topic is hosted by the OIG’s Transportation Directorate.

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