Politics & Policy

The Post Office Should Trade in Its Dinosaur Model for Something Smarter

The Post Office’s legacy fleet. (Tomasz Szymanski/Dreamstime)

On New Year’s Day, the New York Times carried a touching op-ed in which a young Turkish woman, Zeynep Tufekci, registered her amazement on encountering the U.S. Postal Service.

Tufekci, an assistant professor at the University of North Carolina, was clearly transfixed. “I was transported recently to a place that is as enchanting to me as any winter wonderland: my local post office,” Tufekci wrote. “In line, I thought fondly of the year I came to this country from Turkey as an adult and discovered the magic of reliable mail service. . . . Much of our modern economy thrives here because you can order things online and expect them to be delivered. There are major private delivery services, too, but the United States Postal Service is often better equipped to make it to certain destinations.”

Many Americans might chuckle at the idea of the postal service as a provider of “reliable mail service.” But conservatives shouldn’t forget that, among the various government-run boondoggles and money pits, the USPS stands on firm constitutional — if not fiscal — ground. Article I, Section 8 of the U.S. Constitution authorizes Congress to “establish Post Offices and post Roads.”

That’s not to say, however, that we shouldn’t point out postal-service inefficiencies or propose needed reforms. Which brings us to the USPS’s “Next Generation Delivery Vehicle” (NGDV) plan — government-ese for a replacement of the postal service’s fleet of 212,000 delivery trucks.

“This is an organization that is in the red every year in terms of their costs outweighing their revenue,” Ellen Carey, vice president of communications at Securing America’s Future Energy (SAFE), a non-partisan advocacy organization, tells National Review. “They have their Grumman Long Life Vehicles (LLVs) — the little mail jeeps — that were placed in service in 1987, so many of them are going on 30 years old. They get an average of ten miles per gallon and they lack very basic safety features,” including airbags, anti-lock brakes, and intermittent wipers.

“So the postal service is looking to do their next vehicle fleet procurement,” Carey continues. In April 2015, the USPS issued a RFI (request for information) for design proposals for new mail-delivery trucks with a total cost of up to $6.3 billion. Fifteen companies responded to the request. “They want these vehicles to be purpose-built and exclusively designed,” Carey says. “They want a two-wheel drive and a four-wheel drive version — that’s about as diverse as this fleet gets — and they want to keep them in service for at least a 20-year life span.”

“This is not industry best practice.”

No kidding.

UPS, FedEx, and mail-delivery carriers around the world use a mixed fleet of off-the-shelf vehicles and then slightly modify them, if necessary, to fit specific delivery routes. (Virtually all commercial and foreign-government-run delivery fleets rely on off-the-shelf models.) Moreover, the USPS’s competitors turn over their fleets every ten years or so, in order to capture the fuel-efficiency and safety improvements of newer makes and models.

Industry best practices aren’t exactly a secret: The Postal Service’s own inspector general has identified this problem, writing in a 2014 management advisory report that “it is no longer practical to design and purchase ‘custom’ vehicles with long lifecycles, such as the LLV.” Procuring a more flexible fleet “may be desirable.”

Essentially, the postal service will use absurd, wasteful, and inefficient methods to acquire its new delivery fleet — because that’s the way it did things the last time around.

But don’t hold your breath for a government-run organization to adhere to industry best practices — or even the recommendations of its own inspector general. “The Grumman LLVs illustrate exactly what’s to come for this next generation of delivery vehicles. They built a purpose-built fleet that they held on to for 20 years,” Carey explains. “Well, who knows what even the next five years in transportation innovation is going to mean, much less 20 years? Imagine what kind of dinosaurs these vehicles will be!”

By missing out on fuel-efficiency advancements and other innovations, the postal service could spend as much as $2 billion more than necessary on its (already huge) fuel and maintenance costs over 20 years, SAFE estimates. Amid the ongoing paradigm shifts in the industry — how many executives at the post office saw the rise of e-mail a generation ago? — what could possibly be the reasoning behind the current procurement strategy?

Essentially, the postal service will use absurd, wasteful, and inefficient methods to acquire its new delivery fleet — because that’s the way it did things the last time around. “Keeping the vehicles for 20 years is the way they’ve done it in the past, and the way they know how to do it, so I think doing fleet turnover more quickly than that is beyond the scope of their experience,” Carey concludes.

One extraordinary example of the post office’s ineptitude: Last year’s design requests did not even specify a minimum miles-per-gallon standard for the next generation of delivery trucks.

If the USPS were a private company, the American public could rely on the market and the service’s competitors to force financial sanity and discipline. But as a quasi-governmental agency, the post office can count on the taxpayer to foot the bill for any red ink on its balance sheet.

And that’s been happening more and more: Last year, Fortune magazine reported that Congress helps out the post office by more than $18 billion per year in total subsidies; and the USPS itself reports a net loss of $5.1 billion in fiscal year 2015 alone. Amazingly, the postal service hasn’t been in the black since 2006, losing as much as $15.9 billion in 2012.

In the face of these shocking numbers, the American people should demand that Congress step in to force needed change at the postal service. But time is short: The USPS hopes to finalize its fleet-procurement plans by the end of this year, with the Next Generation Delivery Vehicles in service by 2018.

“With urgency, with pressure from the public and Congress, at the very least they would turn over their fleet more regularly, and maybe next they would look at redoing this vehicle-fleet procurement so that it’s more financially efficient,” Carey says. “What success looks like here is that the United States Postal Service implements industry best practices that could save up to $2.2 billion over the next 20 years.”

My grandfather worked as a letter carrier for the USPS for 34 years before his retirement. I hold no animus against an organization that allowed him to raise his family in dignity. But that doesn’t mean Americans should allow the postal service to perpetuate an aversion to innovation and industry best practices; with that attitude, letters would still be delivered via Pony Express!

The delivery-vehicle fleet of the USPS is aging, expensive to maintain, fuel-inefficient, and nearly obsolete, so it makes sense that plans are being developed to bring one of the world’s largest motor pools into the 21st century. But the least we can expect is that this government-run agency can aim for better than “good enough for government work.”

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