Supply Chain Optimization

Postal Service Wants $75 Billion

by Tom Moore on May 11, 2020 8:00:00 PM

The Postal Service, which is, for the most part, a government-mandated disaster, wants…

The Postal Service, which is, for the most part, a government-mandated disaster, wants $75 billion for coronavirus relief.  The reality is that USPS was pretty sick before it got hit with the virus:
  • Heavy unfunded pension obligations
  • Strange, mandated pricing
  • Poor allocation of costs
  • Outdated equipment (look at the delivery vehicles – Grumman LLV = long life vehicle (appropriate) made 1987-1994)
  • Huge competition that knows how to take advantage of the mandate that USPS delivers to every address
Reform is long overdue!
 
USPS and all air freight shippers are seeing wildly higher costs.  With fewer passenger planes in the air, much airlift capacity is gone.  Airfreight is normally 32% of capacity utilization (or ~20 tons on a 747) – so this scarcity has driven:
  • Costs up from $3 to more than $10 per kg
  • Airlines are stripping out seats and putting cartons in the overhead bins
  • Airbus is making cargo pallets that slide into seat tracks
 
Topics: Supply Chain Load Building Optimization SaaS

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