USPS Saves $5 Million Annually With Transportation Consolidation

USPS Saves $5 Million Annually With Transportation Consolidation

[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.