Inspector General Says USPS Could Save Money By Owning, Not Leasing Trailers

The financially troubled U.S. Postal Service would save $85 million over 12 years if it bought the trailers it uses to transport mail instead of leasing them, USPS Inspector General Karla Corcoran said in a report Wednesday.

At issue is the $101 million, six-year lease of 4,475 trailers and 31 converter gears from the Transport International Pool. Although the USPS uses almost 17,000 trailers to transport mail, it leases approximately 12,000 of them.

In a 53-page report of her office’s self-initiated audit of the trailer fleet, Corcoran said leasing “was not the most cost effective method of acquiring trailers.”

At the same time, she chided postal officials for not following their own rules and regulations for acquiring mail transport trailers.

According to Corcoran, postal officials were required under a 1999 rule to file a report with their Board of Governors and obtain their approval before entering into leases and expensive investments of more than $10 million.

Instead of doing that, she said, postal executives “structured the lease for common fleet trailers as a service contract and used a memorandum and recommendation,” denying postal governors “the opportunity to assess and approve the decision to either lease or purchase the trailers.”

Corcoran recommended that postal officials submit a report on the purchase of the leased trailers to the Board of Governors and upon its approval “initiate action to purchase trailers and terminate the national lease.”

She also recommended that the USPS “obtain bids for nationwide maintenance and repair services” for the trailer fleet.

Postal officials argued that the trailers were leased under a service contract not subject to review by postal governors. But they did admit that “there is a slight financial advantage to ownership versus leasing if none of the other total ownership costs are taken into consideration,” but disputed the report’s estimated savings.

Not counting the number of employees involved in tracking and maintaining the trailers, the USPS executives estimated it would cost “a minimum of $1.2 million per year and $16.6 million over a 12 year period” to own the trailers.

The USPS has lost nearly $1.8 billion over the last two years.