Postal Updates

By Bill McAllister, Washington Correspondent

Can the U.S. Postal Service ride the rails to prosperity?

October 31, 2014 03:50 PM

Ever since the United States Postal Service decided to abandon its long relationship with the nation’s railroads in favor of trucking the mail, there have been questions raised about the breakup.

Was this the right decision, especially as newer forms of rail transportation are gaining strength and seem to be more environmentally friendly than trucks?

A new report by the Postal Service’s inspector general raises that question once again, arguing that in the case of New Jersey mail the agency could save about $10.8 million a year by diverting some long-distance truck trips to rail.

Postal management didn’t like that conclusion and argued against the IG’s recommendation.

As the new report, titled “Suitability of Rail Transportation — New Jersey Network Distribution Center,” made clear, postal managers like trucks.

Budget numbers speak the loudest.

“In 2013, the Postal Service spent more than $3.4 billion on HCRs [highway contract routes]and only about $43 million on rail,” the report cautions.

“The Postal Service experienced capacity and reliability issues with rail in the past and has not fully assessed all rail options,” the report said.

Rail, management said, “is not a viable way to meet service standards and does not fit into its operating plans.”

Even so, the IG argued that rail is “a viable option and should be reconsidered.”

The inspector general argued that postal management should more carefully test its assumptions about rail, and review rail options more consistently.

“Rail could accommodate some volume and still meet service standards, but would require expanded transit times,” the IG report said.

Postal management challenged a number of statements in the IG report, including its claim that rail might be cheaper than trucks in one example. Management said the IG had failed to consider the costs of getting the mail to a railroad siding for shipment.

Management did agree, however, to consider some of the recommendations.

Speaking of mail trucks, the U.S. Postal Service has awarded a nearly $28 million contract to Utilimaster Corp. of Bristol, Ind., to supply the mail agency with walk-through style delivery trucks.

These are the type of delivery trucks used by Federal Express and United Parcel Service for parcel deliveries.

Details of the contract were not immediately available.