Dynamic Route Optimization graphic
  • Project Title:
  • Dynamic Route Optimization
  • Start Date:
  • Monday, February 11, 2019
  • Estimated Report Release Date:
  • August 2019

The U.S. Postal Service currently spends about $4.3 billion annually on highway transportation costs and intends to reduce these transportation costs through various initiatives. Dynamic Routing Optimization (DRO) is an initiative that targets the optimization of USPS  Highway Contract Route (HCR) and Postal Vehicle Service transportation mileage and costs. 

Surface transportation routes are normally static (fixed schedule) and operate regardless of mail volume. These static routes limit the ability to gain efficiencies from combining service and reducing overall miles within the transportation network. The DRO initiative allows surface transportation routes to be more flexible and responsive to demands, giving it the ability to consolidate and expand routes based on real-time and projected service demands and mail volumes. This DRO approach requires the use of a Transportation Management System and forecasted mail volumes, which are used to optimize local distribution networks at the Postal facilities. 

Our objective of this audit is to evaluate the cost savings for the implementation of the Postal Service’s DRO initiative. 

  • What dynamic routing processes are working/not working?  
  • What can the Postal Service do to ensure the forecasted manifests are timely and accurate? 
  • What are the challenges, efficiencies and deficiencies of the DRO program and what improvements can be made?   
     

Comments (15)

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  • anon

    I see comments such as those via John C and what he speaks of is answered in a sense by Joan W. The postal service isn’t pushing smaller contractors out. It is giving them a chance to team up so that they can meet the demands of more demanding contracts. So if it seems that they are offering unattainable contracts, it’s at that point you as a contractor can work with one another and secure the manpower and equipment to service said contract. In regards to John C ‘s question about crossing through districts; you must remember that jurisdiction prevails when unions and or job protection is in place. These rules are in place and needed to guarantee solid fair wages and work for long time employees who have earned such. It’s also working against yourself as a contractor to request grabbing extra mail on your way through a town when in actuality you’re taking food out of another contractors mouth who may be currently traveling to get said mail !

    Mar 17, 2019
  • anon

    Hello Jeff Krindle u and Joan w have great points i hope at some point it all works out for the best for everyone , for years my father hauled mail 1960s 1970s 1980s until his passing in 2007 , I have been hauling mail since 1998 , as none union employee I guess we as contractors get afraid just like everyone else , I would personally like to thank the United postal service for giving me opportunities that I may or may not have had and increasing my own customer base within my region , since I was child I loved trucks with being said I always want to own them as well and the usps gave me that opportunity to use my box trucks and tractor trailers and bare the words inscribed U.S. Mail contractor with good pay , thank u for your feed back , John

    Mar 19, 2019
  • anon

    Hello I was just curious I see so many Trucks on certain HCR routes , couldn’t u just speak to the current hcr contractors ? I have had thousands of ideas , I understand the usps has to save money and I agree u must eliminate some contractors , but I think the start should be at how many trucks u send out on a hcr , ie 5 ,24 foot box trucks to service 4 or 5 ao”s ? Kinda silly u could save miles , fuel , hired drivers wages , and save the current supplier right there from going out of business , I see some routes with two tractor trailers going to the same area offices ? At some point it’s like a joke , use only one , and make the other truck do more on the back end with mte transport , also would save thousands with current supplier , also I have routes where I am driving in the same line of travel past Area offices that another supplier is servicing hauling nothing and I my trucks are no where near full ? I ask management why don’t u consolidate ao”s and contracts u could actually save the current supplier or at least a few and millions right there . also I asked about for example towns I am driving through to get to another ao where I could grab the mail from the ao that was in another county they said it’s not in there district ? But current contractor has 10 trucks going to one ao ??? And they are half empty ? Like it doesn’t make sense nobody is doing anything but they come up with dro ? And everyone is seeing dollar signs all these major corperations ? While I am seeing backruptcy signs as a owner of a small fleet of 40 , I know for a fact in my area where I run my fleet I can take my 40 trucks and collectively do 120 trucks worth a work and save the usps tons of money in labor time , fuel , miles tolls , insurance , parking , registration , workman’s comp , Maintence, but everyone wants to haul the mail and these huge companies here the word dro and they think just because the small contractor gets seeded out that they will save money ? The big guys need to be weeded out and the smaller fleets need to be used more efficiently , I look in my yard where we park to handle the distribution hub there’s 100 trucks within a 50 mile radius north or south or west the same story I can promise u if somebody would wake up my 40 trucks could almost handle half of that we are talking about almost 100 plus trucks are riding around empty it got so bad on one route I told the administrator at the Pdc I was not sending a fourth truck out for one it was not helping the United States postal service and it was wasting me money and the usps , they looked at me like I had five heads but they made the change , all I am saying is the Dro concept may make sense in some areas others it will certainly not work , u got huge companies banking on running these routes , sometimes u have to work within what u have , i guarantee If u worked with the mom and pop fleet owners u could save thousands opposed to trying to work with major coperations who are merging together to capitalize on huge fragminted industry and destroy what I know after 25 years to be a great service it won’t be so great anymore , stop letting these contractors get so big....

    Mar 07, 2019
  • anon

    Thank you for your feedback. We understand your concern regarding the elimination of suppliers. The Dynamic Route Optimization goal wasn't to eliminate suppliers. The concept is to have "transportation just in time" meaning when mail processing facilities have mail available, transportation will be called upon to transport the mail. The Postal Service has awarded many DRO contracts to smaller suppliers, there have been some instances where the smaller suppliers do not have the necessary equipment (i.e., Types of trucks, number of drivers) to meet the capacity needed. Crossing districts is a very good point, and we can look into this idea. Unfortunately, the Postal Service is mandated to maintain specific service standards (overnight, 2 day, and 3 day delivery) regarding the timeliness in the delivery of mail, often times, different districts have different service standards, which could be an impact if transportation crosses district lines, but we will certainly bring it up to Postal Service officials. Consolidating Associate Offices (AO's) this is a good idea. The Postal Service has engaged in what is called Delivery Unit Optimization (DUO) which is the consolidation of these offices. Consolidation and closing of offices is very political, and at times, the Postal Service is unable to close or consolidate these offices due to politics. The Postal Service would like to maintain as many current suppliers as possible whether small or large. From our communications with the Postal Service they have told us that small suppliers have won DRO contracts and it has increased their business. In addition, the larger companies that have won some of the DRO contracts have given the smaller companies the option to subcontract. I hope this sheds some light on some of the obstacles and challenges ahead. We appreciate your comments. Please keep them coming. Thank you again.

    Mar 13, 2019
  • anon

    I certainly understand your point , ie what dynamic means , in Hignsight I am certainly not contracting trough any other usps supplier at all , at any costs , there just to many risks involved most current hcr suppliers run tru parent componies meaning they, may or not me involved with fraud to say the least 90 percent they are irs etc ... in some way shape or forum big or small . Last thing I will say is yes the dro would dynamic if could operate the way it was intented too , I have too many friends wich most mail haulers are very close win these dro routes and most at best get so afraid that they bid a rediclous rate lowwww rate ... and it’s still the same frequency as the old routes ? I ask when will that stop ? I have personally went to star route meetings to find they were huge waste of time and yet the less a waste of money , only to have huge hcr suppliers get there pointless questions answered most who knew the answer before coming just to waste other suppliers money ...also 2 years ago I had a contracting officer give up a route that I had been doing for five years on a temp basis and say we didn’t think u want to do it any more ? And then say well it was only temp basis ? Last time I checked temp contracts were 90 days max ? I think there should be more communications to suppliers ... on what’s going on. .. last time I bought 4 brand new trucks just to be shut out of my own routes , that’s not fair , being a business onwer that hauls us mail and some for other companies ie fedex , Amazon , gosht to other yrc Frieght etc I can do any dro , I just think there may need to be more communication between usps and the supplier I don’t want a tap on the back but I have never have always been labor board compiant etc , etc , I have always ran a clean show , I think the usps needs to look more within , I mean we have been working with other suppliers for the last 50 years this is nothing new , I think it personally opens up a new door for fraud , 100% between everyone to the mails sake and the drivers payroll , there’s just not enough meat on the bone to be second to the first that’s a fact , I am a second generation mail hauler if I have to go , it is what is ...

    Mar 17, 2019
  • anon

    As a USPS Supplier as an HCR Contractor for 21 years, I find it hard to believe that the DRO will ever save the USPS money on the HCR side. the problem or issue is lack of communication or the lack of use of the knowledge the USPS benefits from their veteran employees or managers. For an example, I have been trying to get paid for extra trips on a specific HCR for over a year now- to the tune of about $40,000. I have talked to at least 10 different people, spent countless hours of my time compiling documents and forms to prove to them I am justified the payments, just to be only partially paid or none at all. If my total pay as a Contractor for a DRO is going to rely on Postal input to pay me right, I zero belief I will ever be paid on a thorough, timely manner. Another thing- unless the managers. Area Manger/ Specialist, and Contracting Officers want something for me as a Contractor, you can forget about getting an answer or a reply from them in a timely manner- if they ever reply! I do not see this working with a DRO Contractor any better! By the way, I am not a One truck operation- I manage and operate with great efficiency, 25-30 trucks and 7 HCR! For the past 2 years or so, Management has been sparse to non existent when I have needed an answer to current problem. Especially upper Management such as DNO/ Contracts. They are always passing the buck to someone else!

    Mar 06, 2019
  • anon

    Three main pitfalls of the Dynamic Routing Optimization program being put into place by the USPS are: 1. Small businesses are being forced out of business or are being asked to bid on contracts above their capability. They may have the option to subcontract with a successful bidder, but a subcontract can be more of a risk than a contractor may want to undertake. A subcontractor is at the mercy of the prime contractor without the backing of the USPS. 2. Cost savings and dynamic routing can be accomplished with the current contractors. Every contractor can see opportunities for savings on their contracts. Many administrative officials are unable to accept cost saving ideas proposed by contractors and are unwilling to submit service changes even when they would benefit the Postal Service. Examples can be provided upon request. 3. What happens when a successful DRO bidder defaults after being awarded a contract? There will be a limited supply of contractors left to fill the gap. This could ultimately lead to undesirable public service.

    Feb 26, 2019
  • anon

    We thank you for your response. Currently, the Postal Service has over 4,000 transportation suppliers, and their goal is to reduce the number of suppliers. The struggles with too many transportation suppliers is the managing, and assuring the service needed from the Postal Service is provided. However, if you can please provide us with examples of cost saving ideas proposed by contractors that could benefit the Postal Service, we would greatly appreciate it. We appreciate your comments, and will look into your concerns.

    Mar 01, 2019
  • anon

    Watch how u answer questions about UPS since it in not the USPS???

    Feb 24, 2019
  • anon

    The DRO is not a dynamic routing program currently, as it is a static schedule. If the DRO were to be successful it would be Dynamic - leaving when full and then returning as soon as the driver arrived at the destinating facility. This would greatly enhance the productivity of the processing facilities as they would have mail all through the day. Once this process is initiated, then the local AFO's would understand that all mail would be tendered as soon as the inbound arrived and not wait until all carriers are in for the night. This would eliminate layovers, that are an added cost to moving the mal. This would save the USPS millions!!

    Feb 21, 2019
  • anon

    Thank you for your comments. You're right that in some instances the DRO program has returned to a static schedule. We have found that there are some issues that the Postal Service is working through, such as ensuring that mail processing is completed on time. As for the carriers, you're correct that the ideal situation would be that when the supplier arrives at the facility, the mail would be tendered as soon as possible, and not wait for the last carriers to arrive. We appreciate your comments, and will look into the associate offices where suppliers are being held over. Currently, we are concentrating on the major plants, however, this is a very important aspect that you brought up.

    Mar 01, 2019
  • anon

    I never receive any of my stuff when it comes Through UPS.

    Feb 12, 2019
  • anon

    UPS IS NOT THE POSTAL SERVICE That is united parcel service (sorry)

    Feb 24, 2019
  • anon

    The Postal Service has nothing to do with UPS that is united parcel service. ??

    Feb 24, 2019
  • anon

    Thanks for your message. For lost or missing packages, the U.S. Postal Service (USPS) recommends contacting the Consumer Affairs Office (www.usps.com/help/welcome.htm or 1-800-222-1811) and they will be able to assist you.

    Feb 19, 2019

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