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OAKLAND, Calif. — [Editor's note: This article has been slightly modified to clarify when the HCAP was launched, and inaccurate data on gas costs for the USPS has been removed.]
Since deploying a transportation optimization system two years ago, the United States Postal Service has saved $10 million through consolidating delivery trips.
The USPS piloted the Highway Corridor Analytic Program (HCAP), created in conjunction with IBM, in 2006. Developed with the ILOG CPLEX optimization software, the HCAP helps the USPS determine the best way to allocate mail among its transportation resources.
The USPS has various transportation methods for moving around mail, depending on the type of mail and when it needs to be delivered. Mail can flow through a number of networks, processing and distribution centers and air mail centers, with some trips overlapping.
Using the HCAP, the USPS inputs its existing network and routes, and sets constraints such as pickup and delivery times, truck capacity and start and end points. The program analyzes existing operations and figures out alternative loads and routes to reduce costs.
The USPS piloted the program in select areas, finding savings of $1.3 million annually in Chicago, $3.7 million annually on the West Coast and $400,000 annually in Greensboro and Pittsburgh, adding up to more than $5 million and about 615,000 gallons of gasoline saved a year.
Consolidation Likely as Markets Discount Earnings Optimism
The major U.S. index futures are pointing to a lower opening on Monday, with the futures shedding much of their early gains. The mood in the rest of the global market was upbeat, with the Asian averages extending their gains, while the European markets are also staying afloat. The recent optimism built on the back of positive earnings may face test in today’s session, as the markets await the new home sales report to be released shortly after the markets open.
Transportation Consolidation
Also, a note this week from Stifel Nicolaus says the level of truckload pricing competition has heated up in the past six weeks. Stifel analysts highlighted a recent survey done by Lana Batts, managing partner of Transport Capital Partners, which found that 60% of the truckload carriers surveyed believe freight rates will decline over the next year and 55% of shippers are currently seeking rate decreases.
In addition to lower rates, numerous truckload shippers are extending payment terms from 30 days to as many as 60 days, making it more difficult for carriers to fund their operations in a down market. “One notable shipper is seeking to triple its timetable to 120 days,” Albrecht says.
And for carriers, an increasing percentage of lines of credit are being dedicated to letters of credit for to insurance and other costs. Several carriers said that letters of credit have jumped by 50-100% the past couple of quarters vs. a year ago.
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Consolidation expected as truckload rates continue down
With requirement and market prices going out down, truckload carriers are making an attempt provided the foot lines and freight households and shippers desire to still be to uphold this communication surrounded by carriers to ensure timely shipments. In fact, according to a the most recent survey, 21% of truckload carriers implied the present properties got possibly to mull over liquidating in the following six months.
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Point may be moot
The point may a moot one - since the USPS is considering a cut of services on Tuesdays and Saturdays. Those are the slowest mail days of the week, and with recession on and the government spending more on banks that use the bailout cash (read = tax payer dollars) on corporate jets instead of essential services, I guess it would make sense to do that. Meanwhile, unemployment continues and the middle class are now starting to turn to payday loans, and things are getting worse.
save gas
All supervisor on the detail program , my supervisor make money on mileage . He told me , he could making over 1000.00 a month . you seeeeee , USPS save money on the carriers , but they lost money on there own .
Transportation Consolidation
Amazing! Our area must not have heard about this great new plan! They just ADDED 2 MORE TRIPS per DAY! That addition has DOUBLED the amount of TRUCKS AND DRIVERS! All of this to bring us more DPS (approximately 100 pieces of letter mail per day.) than raw mail and to keep the mail flowing.