The U.S. Postal Service Continues To Burn Money

Ken Blackwell
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Posted: Oct 05, 2015 12:01 AM
The U.S. Postal Service Continues To Burn Money

Editor's Note: This column was originally published with the wrong byline. We apologize for the error.

Most people are going to tell you that they can’t stand seeing good money go to waste. When it comes to the U.S. government, however, wasteful spending continues to be the name of the game. A repeat culprit of government waste—the United States Postal Service (USPS), which recorded a revenue loss of $5.5 billion dollars in 2014 alone—is considering a $6.3 billion purchase of mail delivery vehicles using an unnecessarily expensive, out-of-date approach it employed nearly 30 years ago.

Of course, maintaining one of the world’s largest civilian vehicle fleets comes with its costs, but it appears the service has done little to minimize those. Like it did in the 1980s when the Postal Service purchased its iconic “mail truck” that we see today, the aptly-named Grumman Long Life Vehicle (LLV), the USPS is again considering buying up to 180,000 custom-built, identical vehicles, and keeping them for decades. This decision is illustrative of just how stuck in years past our government can be. The average age of an LLV vehicle is 24 years, they cost a fortune to maintain due to their age, and don’t include features as basic as air conditioning and anti-lock brakes.

Not every mail route is the same, so there is no reason why we should pigeonhole one vehicle into a variety of applications, where they will be underused or inappropriate for the job. The type of delivery vehicle needed in urban areas such as Manhattan is different from what is needed in rural Montana. Instead of giving one company billions of dollars to build a costly new delivery vehicle from scratch exclusively for USPS, the Postal Service should purchase vehicles that are in the market today and can be easily adapted for the diverse needs of the Service.

Buying or leasing cars, vans, or SUVs of different sizes off the shelf and modifying them slightly would generate significant cost savings for the Postal Service while giving it the flexibility to cater to specific routes and the needs of its drivers. What’s more, by turning over the fleet every 10-12 years, the Service will be able to take advantage of reduced maintenance costs, new technological developments and better gas mileage, something it has not done with its current stone-age mail trucks.

According to a report commissioned by Securing America’s Future Energy (SAFE), a group dedicated to improving America’s national and economic security by reducing its dependence on oil, and for which I serve as Senior Advisor, USPS could save up to $1.9 billion by using a mixed fleet of off-the-shelf vehicles instead of building a new vehicle all over again—one we would be stuck with for another 20-25 years. No wonder private sector package delivery leaders such as FedEx and UPS all rely on a mixed fleet of regular consumer vehicles that have been slightly customized to meet their needs.

Saving money on fuel and maintenance down the road is a no-brainer. The old fleet of LLVs averages about 10 miles per gallon, a joke by today’s standards and one of the reasons why it costs more every year to send a letter or a package. To illustrate how silly this is, a 2015 Ford F-150 pickup truck has a combined mileage of 22 mpg—more than double that of the much smaller LLV.

Who knows what our cars and trucks will look like in 20 years, but with the introduction of new technologies like crash-imminent braking, more efficient engines, or even alternative fuels, it’s safe to say that the cars of tomorrow will be very different from the ones you and I drive today. For the safety of its drivers and the financial health of its business, USPS should design its fleet in a way that allows the Service to adopt new automotive technologies over time and reap the financial benefits.

It’s not a bad thing for the USPS to follow the example of its contemporaries in the private sector by taking advantage of higher efficiency and more cost-effective vehicles to conduct its business. If the Postal Service wants to do things the right way, it should make sure to take a good look at all its options before spending billions of dollars on a new fleet. Instead of being the poster child for government waste, USPS has the chance to show that efficiency is important, and that it is capable of making smart financial decisions. Let’s hope that it does.