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?