Postal Service Looking at LTL

NEW YORK – To save money and stave off operating losses, the U.S. Postal Service is investigating increased usage of less-than-truckload carriage, according to the service's deputy postmaster general.

Speaking to a Bear Stearns investors group here Thursday morning, John M. Nolan said LTL can offer benefits in two areas -- timely delivery and cost savings relative to air freight.

The Postal Service is especially eager to save money after losing $199 million in fiscal 2000. It is expected to lose at least $2 billion in fiscal 2001.

Nolan said the postal service “could be going out to bid in the near future,” although he could not offer a firm date.

Not only might the LTL companies take freight from air cargo carriers, but from truckload carriers as well.

While the service will continue to buy in truckload lots, he said USPS will try to move away from shipping incomplete truckloads or holding mail for two days in order to build a full truckload. He said that would be the new strategy for using LTL carriers. LTL would also serve as a substitute for air freight.

A potential candidate for postmaster general after William Henderson steps down on May 31, Nolan also said USPS will start its alliance with FedEx (FDX) on August 27. As part of the deal, he said Emery Worldwide has been notified its services for express mail will no longer be needed.

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