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.
USPS needs better fuel practices: GAO
