Struggling USPS needs new delivery truck fleet, updated equipment

The U.S. Postal Service continues to struggle financially, but it needs to replace its aging fleet of delivery vehicles and update other equipment, leaving it to have to make some tough spending decisions ahead, according to a recent Government Accountability Office report.

“USPS faces a serious financial situation with insufficient revenues to cover expenses,” the June 28 report states, adding, “This uncertainty may result in USPS's making capital-spending prioritization decisions that can lead to tradeoffs across planned capital projects and potentially between capital spending and other organizational needs such as operational expenses. “

According to the report, USPS expects an average annual capital cash outlays of $2.4 billion from fiscal years 2018 to 2028, about 70 percent more than the $1.4 billion average from fiscal years 2007 to 2017. That includes its plans to purchase new fleet of delivery vehicles in 2019, as well as plans to purchase new mail-processing equipment.

The Postal Service does have processes in place that help it identify the uncertainties and risks that may affect its capital spending and adjusts its capital spending accordingly, according to the report.

“Specifically, USPS sets a capital-spending budget in its overall financial plan, to help ensure that spending is in line with expected resources. USPS's process also allows it to shift funds if needed, such as to repair a facility damaged during a natural disaster. USPS also reviews individual capital projects during implementation and can change specifications or time frames based on changing circumstances,” the report states.

Reader comments

Fri, Jul 6, 2018 Sam USA

Those delivery vehicles were called Long Life Vehicles (LLV for short) when Grumman custom built them for the USPS between 1987 and 1990. They have aluminum bodies that do not deteriorate. All they need is new replacement engines and transmission. The original 4 cylinder engines and transmissions in them were made by GM.

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Edward A. Zurndorfer Certified Financial Planner
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