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Management Advisory - Benchmarking of Delivery Fleet Replacement Strategies

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    Benchmarking Delivery Fleet Replacement Strategies
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Audit Reports
Category: Transportation / Vehicles

Management Advisory - Benchmarking of Delivery Fleet Replacement Strategies


The U.S. Postal Service operates one of the largest vehicle fleets in the U.S., with almost 190,000 vehicles used for collecting and delivering mail. The Postal Service recently developed a plan to replace the vast majority of this fleet over 12 years, beginning in fiscal year 2015. Fleet replacement is not a challenge unique to the Postal Service, as many foreign postal operators (foreign posts) are acquiring vehicles to modernize their delivery fleets.

Our objective was to identify foreign posts’ best practices for delivery fleet replacement strategies that could help the Postal Service develop and acquire the next generation of collection and delivery vehicles.

What The OIG Found

Generally, we found Postal Service delivery fleet replacement strategies were either consistent with or as compelling as the best practices and strategies used by foreign posts. However, the survey responses from the foreign posts disclosed four best practices and strategies used by the foreign posts that might be useful for the Postal Service to consider as it plans to acquire new vehicles. Specifically, the foreign posts primarily:

■ Purchased/leased vehicles annually within a 3- to 9-year replacement cycle. ■ Operated their vehicles primarily on diesel/bio-diesel fuels, with limited investments in other green technologies.

■ Outsourced vehicle maintenance and repair as part of a vehicle lease agreement.

■ Acquired alternative delivery vehicles for letter and small parcel distribution in urban areas.

On the other hand, the Postal Service plans to purchase custom-built and some commercially available vehicles over a 12-year period. These vehicles will have an estimated useful life of 18 to 20 years, with an as-yet determined alternative fueled powertrain. Also, the Postal Service uses primarily in-house vehicle maintenance facilities. Finally, the Postal Service has no specific plans to invest in alternative delivery vehicles such as ebikes and etrikes because its pilot programs showed these vehicles do not fully meet Postal Service delivery needs and cannot be used effectively on most routes.

These four best practices of foreign posts offer the Postal Service supplementary information as it finalizes its strategy for future vehicle acquisitions to ensure an efficient, cost effective, and sustainable delivery fleet. Therefore, we are not making any recommendations on these issues.