U.S. Postal Service

May 18, 2011 by staff 

U.S. Postal ServiceU.S. Postal Service, The United States Postal Service (USPS) is in financial crisis. It also has the largest fleet of civilian institutions, with many of its delivery vehicles to reach the final of the expected 24 – year lifespan.

USPS is subject to certain legal requirements governing the federal fleet, including the requirement that 75 percent of vehicle purchases USPS is able to run on alternative fuel than gasoline.

This testimony addresses (1) the financial condition of USPS, (2) USPS delivery profile of the fleet, including the form of USPS has responded to the needs of alternative fuel vehicles and their experiences with these vehicles, needs (3) advantages and disadvantages of the USPS to meet its delivery fleet and (4) options to finance a major acquisition of delivery vehicles. This testimony is based primarily on GAO-11-386, which is being released today.

For this report, GAOanlyzed data from USPS; USPS visited facilities and met with USPS and other officials. The GAO report recommends that the USPS must develop a strategy to address the needs of its delivery fleet to take into account the effects of possible operational changes, legal requirements of the fleet, and other factors. USPS agreed with the recommendation. For this testimony, the GAO also relied on previous and ongoing work on the financial position of USPS and USPS date financial information.

USPS’s financial situation continues to deteriorate. During the first 6 months of fiscal 2011, the USPS reported a net loss of 2.6 billion and – worse than expected – and that in the absence of legislative changes, which will default on payments to government, including $ 5. 5000000000 the payment of retiree health benefits. The GAO reported that USPS Congress and need to reach agreement on a package in USPS to financial viability.

USPS delivery fleet is largely composed of the measure, vehicles drive on the left, designed to last 24 years, including about 141,000 gasoline-powered vehicles (16 to 23 years) and 21,000 flexible fuel vehicles capable of run on gasoline or 85 percent ethanol (E85) (about 10 years old). Its flexible fuel vehicles and many of its 22,000 left-hand drive vans, which are also capable of running on E85 were purchased to meet the 75 percent requirement of the acquisition of alternative fuel vehicles. Delivery vehicles travel about 17 miles and use the equivalent of about 2 gallons of gas per day on average.

USPS has a limited range of experiences with other alternative fuel vehicles, such as compressed natural gas and plug-in electric vehicles, most of which have higher life cycle costs of gasoline vehicles. USPS approach to address the delivery needs of the fleet is to maintain its current fleet until it determines how to address their long-term needs.

USPS has been a small increase in direct maintenance costs over the past 4 years, who were about to 2,600 per vehicle in FY 2010. However, each time incurring the cost of unscheduled maintenance due to breakdowns, which can disrupt operations and increase costs. In fiscal year 2010, at least 31 percent of USPS costs of maintenance of vehicles out for unscheduled maintenance, 11 percentage points above the target of 20 percent of USPS.

USPS financial challenges limit the options for financing the delivery of the vehicle replacement more or remodeling, with an estimated cost and $ 5.8 million and, respectively (in 2005) and $ 3.5 million. USPS and other federal and nonfederal officials see little potential to finance fleet replacement through grants or partnerships. If Congress and USPS agree on a package of measures USPS to financial viability, such an agreement could improve USPS’s ability to invest in delivery vehicles.

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