USPS Reconsiders Using Intermodal Rail

A report from the USPS came out yesterday recommending committing to intermodal rail for long distance shipments. For the past decade or so, USPS has used only highways for moving the mail, but with the financial mess they are in, they are looking to cut cost in whatever ways they can. If this were to happen, it could be very large for the railroads in terms of volume and profit. There is a huge USPS facility right next to Croxton that would seem to be a great fit for such a service. It should be right down the road from CSX North Bergen as well.

http://www.uspsoig.gov/rarc-summary.cfm?ID=34


I was skeptical at first, but this came directly from USPS and they seem pretty serious about it. Thoughts?

There is also a regional railroad that goes down that far aswell and actually could go right into the post office property if the usps decided to load trucks there. And there has been talk about CSX taking some trains out of little ferry, another site that this little regional goes thru. One can dream cant they lol

the USPS report implies in the Q&A at the end that they would not move first class by rail or priority mail, only standard and bulk mail. Still, that could be a material increase in shipping. I wonder how much volume USPS has lost to UPS and FedEx Ground in those mail classes?

I also think they haven't adjusted their thinking to the internet age. If I need to send something fast, it goes FedEx or I try to send it electronically. A physical letter doesn't need to get to Chicago in 2 days...4 would do...because any truly time-sensitive material will go express mail or electronically. Just my 2 cents.

It Really seems like a no-brainer especially in this area where the big facility is so close to so many rail yards. They absolutely need to cut costs in order to survive so this story might have some legs to run with. Why they ever pulled their traffic off the rails in the first place is beyond me. They used to be the railroad's second largest intermodal customer behind UPS.

And no, the NYSW will not see mail trains in our lifetime. There are so many reasons, I wouldn't know where to start...

USPS hasn't lost any volume of standard and bulk mail to UPS/FedEx. Those two don't handle standard and bulk (a/k/a "junk"), only some 1st class (express or overnight mail) and 4th class, what the usps calls parcel post or packages.

Since I work for USPS I'll fill you all in a little bit. First of all about the finances, listen to nothing you see and hear on the news. Our only problem is a prefunding mandate from 2006 of 5.5 billion a year for 10 years-basically covering yet to be hired employees (something no company does). What you see and hear is being done to influence public opinion for many different reasons having nothing to do with the internet either-we're still doing ok and being a gov't agency we are NOT allowed by law to make a profit: hence us being a not for profit operation. That's all I'll say without straying too far off topic. As far as seeing them go to the rails again, believe it when you see it. Correct, only the USPS takes 3rd class (formerly known as junk mail), FedEx and UPS don't since it's not profitable to a publicly traded company. Actually, thanks to the boom of online ordering, both FedEx and UPS have been handing off a lot of their parcel business to us in the last year or so for the "final mile" of delivery because we have proven more reliable enough that they trust us. You'll see the UPS "package cars" (what they call their brown trucks) behind the local P.O. dropping off the goods usually between 9-10am every day. And FedEX flies our express mails because we don 't own or lease airplanes. You see, we're all really not competiters anymore, lol.......

It's about time this was considered. In the commercial world hardly any company ships trans-continentally or even two thirds across the country anymore. Many trucking companies haul tractor-trailer as far as Chicago and turn the trailer over to rails for delivery to CA or WA where they have other tractors that pick it up for delivery. Almost every trucking president has given speeches saying that the cost of the rail portion of the move is much less than just the labor or fuel cost of them driving it over the road.

I was wondering when the USPS was going to get around to looking into the economics of some of their moves just as manufacturing and retailing businesses have in the past decade.

pdman wrote:It's about time this was considered. In the commercial world hardly any company ships trans-continentally or even two thirds across the country anymore. Many trucking companies haul tractor-trailer as far as Chicago and turn the trailer over to rails for delivery to CA or WA where they have other tractors that pick it up for delivery. Almost every trucking president has given speeches saying that the cost of the rail portion of the move is much less than just the labor or fuel cost of them driving it over the road.

I was wondering when the USPS was going to get around to looking into the economics of some of their moves just as manufacturing and retailing businesses have in the past decade.

LOL!! If you all only knew how they never look at the economics of their moves, nothing would surprise you. This is the same agency that eliminated 100,000 jobs through attrition over the last few years, eliminated thousands of routes but still added 23% more mgt jobs paying from $70-100 grand on up. As far as the rails go, when you get down to it, to mail a simple letter or bill payment a few states away takes only a couple of days or so. Third class mail isn' t really urgent so they probably didn't see the need to use rails as our network isn't as simple as one might think. The big hit in 1st class occured in 2008 with the financial meltdown as the banks, contruction and real estate industries were the 3 biggest customers of the USPS.

This isn't as clear cut as you might think. If the post office doesn't have strong traffic flows it could be in the position of having to send one or two TEU's to thousands of destinations instead of thousands of TEU's to a few destinations.

BTW back when the USPS shipped on Amtrak it mostly sent media and bulk mail on the train.

Jersey_Mike wrote:This isn't as clear cut as you might think. If the post office doesn't have strong traffic flows it could be in the position of having to send one or two TEU's to thousands of destinations instead of thousands of TEU's to a few destinations.

BTW back when the USPS shipped on Amtrak it mostly sent media and bulk mail on the train.

No matter what it was, it generated $100 Million. I think that's worth some serious consideration.

RE: By 1994 Amtrak had more than $100 million in annual business with the Postal Service
providing nationwide transportation and mail sorting services.