Screaming Eagle

Every time the price of a gallon of gasoline goes up one penny it costs the Postal Service $8 million dollars a year. Transportation cost the post office $6.5 billion in 2007, $500 million more than the year before.

Conventional wisdom holds that there are two ways to have more money: make more or spend less. Patrick R. Donahoe, the Deputy Postmaster General and Chief Operating Officer of the USPS, tells FederalNewsRadio, "from a fuel perspective, we focus on two things: the price and the usage."

PRICE

The fact that we do operate the largest civilian fleet in the U.S., it helps us a little bit, from a pricing standpoint. We negotiate contracts for bulk fuel purchase, whether it's fuel that we put into the ground at our large facilities and pump ourselves, or in some cases, we actually have credit cards that we can use with fuel service stations across the country that we give to contractors to use to get a better price.

Donahoe didn't say what prices the agency has been able to negotiate, but even though it is less than retail, it still goes up over time.

USAGE

The Postal Service currently runs 250,000 routes, most of them motorized. To keep costs down, the post office uses GPS and other technology to determine the best way to set up those routes. They expect a savings of about 7 percent along improved routes, not just in fuel costs but also in work hours spent delivering the mail.

Already the largest civilian flexfuel fleet in the nation, the USPS is looking to other alternatives as well.

For example, in cities some letter carriers can walk or takes a bus from the post office to their delivery route rather than driving.

In addition, in some warm-weather areas such as Florida, Texas and Southern California, consideration is being given to launching bicycle routes

Hybrid vehicles can also save fuel, but they may not be best for the Postal Service, he said, because generally, the agency keeps vehicles for 20 years. While hybrids save on fuel, if they are kept so long the batteries have to be replaced, that can be quite expensive.

The Associated Press contributed to this story.

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