- Project Title:
- Postal Vehicle Service Fuel Consumption & Cost Risk Mitigation
- Start Date:
- Tuesday, June 13, 2017
- Estimated Report Release Date:
- October 2017
The U.S. Postal Service has a fleet of over 7,600 Postal Vehicle Service (PVS) mail transport vehicles. As a result, USPS is one of the largest consumers of fuel in the nation.
Fuel can be one of the most unstable costs businesses manage because of price instability. Events domestically and globally affect fuel prices, including natural disasters, disruption of or reduction in supply, increased taxes, market performance, geopolitical events, and new technology.
Since 2014, fuel prices have decreased from over $4.00 per gallon to $2.56, and the Postal Service realized the savings. However, when prices increase, USPS must pay the additional cost; unlike its competitors, they cannot pass these additional fuel costs to their customers.
Consequently, this may result in a significant increase to operational costs, and the impact is more significant because of the decline in mail volume since 2007 and increasing transportation costs since 2013.
Our objective is to determine whether the Postal Service is positioned to mitigate the risks associated with increased fuel consumption and projected diesel fuel cost increases for its Postal Vehicle Service fleet.
- How can the Postal Service mitigate projected fuel price increases and reduce fuel consumption for its Postal Vehicle Service fleet?
- How can the Postal Service convert its PVS vehicles to alternative fuels?
- What should the Postal Service do to determine the most economical and viable fuel conversion?