The United States Postal Service (USPS) recently announced that it plans to replace its aging delivery fleet with up to 180,000 identical “Next Generation Delivery Vehicles” (NGDVs), potentially missing out on up to $2 billion in savings by using an alternative approach.
The United States Postal Service (USPS) recently announced that it plans to replace its fleet of Grumman Long Life Vehicles (LLVs) with up to 180,000 identical “Next Generation Delivery Vehicles” (NGDVs). In this report, however, SAFE finds that an alternative approach using a mix of lightly modified off-the-shelf vehicles could generate nearly $2 billion in savings for USPS while providing a valuable opportunity for fiscal reform.
Making a one-time bulk purchase as is proposed condemns the Postal Service to a fleet of vehicles that has no ability to incorporate new technologies over time, little flexibility to adjust to changes in market dynamics over the next two decades, and very little resale value in secondary vehicle markets. Please find detailed analysis on the USPS fleet procurement conducted by Keybridge LLC here.
A smarter, more efficient, and cost-effective way to spend postal funding would be for USPS to purchase a mixed fleet of off-the-shelf vehicles that are slightly modified for the routes and terrains for which they will be used and upgrade the fleet at least once in the next 20-25 years.
This more flexible approach would save USPS an estimated $1.9 billion over the next 25 years through lower maintenance costs and higher fuel efficiencies, giving the service more predictable operating costs. It would also allow USPS to more regularly take advantage of the latest vehicle safety features and ensure the Service remains relevant in a rapidly changing market environment.
SAFE commissioned economic policy research firm Keybridge LLC to conduct the report’s analysis. In the brief, Keybridge and SAFE find that the total cost of ownership of a fleet composed of a variety of off-the-shelf vehicles would be significantly less than one based around a single, custom-built vehicle manufactured exclusively for USPS
