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Rail News: Intermodal

Intermodal rail a 'sensible' transportation option for U.S. Postal Service, inspector general report says


Intermodal rail is a “sensible option” that could help the U.S. Postal Service (USPS) reduce expenses, improve environmental sustainability and maintain service standards if some mail that now moves by truck is transported by railroads, according to a report recently issued by the U.S. Postal Service Office of Inspector General's Risk Analysis Research Center.

Titled, “Strategic Advantages of Moving Mail by Rail,” the report found that in the short term, shifting a portion of mail volume from truck to intermodal rail could yield $100 million in annual cost savings without requiring changes to the postal service’s network. In addition, USPS could save significantly more in the long run by realigning its processing and transportation network, and “strategically recommitting to the use of intermodal rail,” the report states.

Moreover, the use of intermodal rail can significantly reduce greenhouse-gas emissions and help the postal service meet its environmental goals.

“Because of its lesser sensitivity to fuel price increases, its stable labor capacity and greater control of its own infrastructure, rail transportation has major, long-term strategic advantages over highway,” the report’s authors state in an executive summary.

USPS has a long and storied history of moving mail on rail dating back to the early 1800s, but today, it mostly meets its surface transportation needs by using trucks, the report states. Last year, the postal service spent more than $3.3 billion on highway contracts and only $40 million on freight-rail contracts.

“By contrast, postal competitors have greatly expanded their use of rail and have worked hard to realign their networks with the nation’s railroads,” the report’s authors state in the summary.

The authors recommend that USPS:
• incorporate intermodal rail into existing surface transportation options;
• align the processing and surface transportation network with the nation’s rail infrastructure instead of highway as a long-term strategy; and
• seek outside expertise or develop rail intermodal expertise in house.