Tuesday, July 17, 2012

USPS OIG suggests moving back to rail

Could save $100 million annually in the short term and significantly more over long term.

Intermodal rail is a “sensible option” that could help the U.S. Postal Service (USPS) reduce expenses, improve environmental sustainability and maintain service standards if some mail that now moves by truck is transported by railroads, according to a report recently issued by the U.S. Postal Service Office of Inspector General's Risk Analysis Research Center.

Titled, “Strategic Advantages of Moving Mail by Rail,” the report found that in the short term, shifting a portion of mail volume from truck to intermodal rail could yield $100 million in annual cost savings without requiring changes to the postal service’s network. In addition, USPS could save significantly more in the long run by realigning its processing and transportation network, and “strategically recommitting to the use of intermodal rail,” the report states.
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USPS has a long and storied history of moving mail on rail dating back to the early 1800s, but today, it mostly meets its surface transportation needs by using trucks, the report states. Last year, the postal service spent more than $3.3 billion on highway contracts and only $40 million on freight-rail contracts.

“By contrast, postal competitors have greatly expanded their use of rail and have worked hard to realign their networks with the nation’s railroads,” the report’s authors state in the summary.



The study in question. About time really; I'm surprised that previous Republican harping on about trying to cut inefficiency in government didn't result in going back to rail earlier. Then again, taking this long does feed back into Republican complaints about government efficiency.

I don't believe Amtrak will receive the contracts; the Class Is are perfectly capable of forming consortia to bid for a coast-to-coast train if need be and the last thing Amtrak needs is to screw up its long-distance routes and offend the host railroads by stealing business from them again.

3 comments:

  1. OTOH long-distance mail was, for a long time, passenger rail's natural purview, to the point where the mail car was a de facto government subsidy for passenger rail.

    I wouldn't be surprised to see Amtrak and mix-and-match Class I consortia bid on such a contract.

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    Replies
    1. It was passenger rail's natural purview, but at the same time, that was pretty much during the era of private passenger rail as well.

      There's really no reason why Amtrak should win this or even seek to bid, though it would mean lost revenue. It would almost certainly result in delays to their trains, with attendant costs when that involves missed connections, it would severely annoy the host railroads who will start interfering with Amtrak again, and Amtrak no longer has any transcontinental trains, meaning that all of that mail is going to have to transfer.

      To be honest, I don't think Amtrak actually has the capacity to do a meaningful amount of postal service. Using Amtrak's current shipping for occasional package or letters to the various boonie towns? Eh, I could see that. But the real volume is going to fill up more than the handful of boxcars that Amtrak could get away with before the freights started insisting on treating Amtrak like a freight, and you might as well go full length unit trains of intermodal or high cube boxcars at that point (depending on how USPS wanted to handle things; there's arguments either way though likely plain old intermodal).

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    2. Can you explain more what you mean by "It was passenger rail's natural purview"? At the time, railroads ran both passenger and freight trains. The mail car ran with passenger trains, but that's less a matter of passenger vs. freight and more a matter of speed and value per weight. It's similar to how the one kind of high-speed freight is TGV La Poste.

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