USPS needs better fuel practices: GAO

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The U.S. Postal Service still remains vulnerable to fuel price 
fluctuations despite cost containment efforts and increased revenues 
from the January 2006 rate increase.
The U.S. Government Accountability Office report called "U.S. Postal 
Service: Vulnerability to Fluctuating Fuel Prices Requires Improved 
Tracking and Monitoring of Consumption Information," published last 
week, was done at the request of Congress and concluded the agency 
must improve the tracking and monitoring of its fuel consumption.
"The [USPS] absorbed fuel cost increases through cost containment 
efforts and increased revenues from the January 2006 rate increase, 
allowing it to achieve net income for the year," the GAO said. 
"Nevertheless, the [USPS] remains vulnerable to fuel price 
fluctuations, due in part to its purchasing process, which involves 
buying fuel as needed, often at retail locations."
The report acknowledged the impact rising fuel prices had on USPS 
transportation and facility fuel costs in recent years citing, for 
example, that fuel cost growth for the agency's vehicle fleet was due 
to rising prices rather than consumption.
"While fuel costs have directly pressured [the USPS'] financial 
condition, increasing compensation and benefits were the primary 
driver of the $3.4 billion operating expense increase in fiscal year 
2006," the report said.
The GAO collected fuel cost and price information, interviewed USPS 
fuel officials and compared the agency's actions against leading 
practices and federal requirements for the report.
Some of the USPS' actions to control fuel costs were found to be 
generally consistent with procurement and consumption practices 
advocated by leading organizations and federal requirements for 
purchasing alternative fuel vehicles. However, the GAO also 
identified areas where more actions could be taken.
The GAO said the agency was inconsistent with leading practices when 
it came to tracking and monitoring fuel data, stating that its data 
was incomplete for most of its transportation and facility fuel 
consumption.
It also said the agency has had limited progress on reducing its 
reliance on petroleum-based fuels as required by federal law.
"Although the [USPS] has over 40,000 alternative fuel-capable 
vehicles, it continues to be unable to reduce its reliance on 
petroleum-based fuels due to higher costs and limited availability of 
alternative fuels," the report said.
The GAO has recommended that the USPS postmaster general take actions 
to improve the tracking and monitoring of transportation and facility-
related fuel consumption data.
The GAO said taking action to address data inconsistencies is 
important, even as the USPS develops a new energy strategy.
"Additional progress is needed in reducing reliance on petroleum-
based fuels because of the more stringent federal fuel consumption 
requirements that were recently passed," the GAO said.

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