Postal Service Ends LTL Bid


 UPDATED:
8/22/2011 11:30:00 AM
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Facing a major restructuring and the closings of thousands of post offices, the U.S. Postal Service is ending its foray into less-than-truckload hauling on Sept. 19.

The USPS said in a filing to the Postal Regulatory Commission on Friday that it intends to terminate its Collaborative Logistics market test.

The program began in May 2009 and was set to expire May 6, but was extended another month. The USPS had even moved for an additional extension until it filed notice that Collaborative Logistics would be established as a permanent product.

Under the program, USPS went after LTL freight to even out mail shipments between cities by filling out trailers. In its filing, the postal service had termed Collaborative Logistics a major success, saying its generated millions in revenue over its two-year span testing period and promised continued growth.

But USPS said it has since reevaluated its plans based on a planned reorganization and poor financial condition.

In August, the postal service disclosed that it lost $3.1 billion in its fiscal third quarter ended in June, compared with a $3.5 billion loss in 2010. The USPS handled 39.8 billion pieces of mail in its third fiscal quarter, but this volume was down 1.1 billion pieces from a year ago.

For the fiscal year, the Post Office has lost $5.7 billion, compared with $5.4 billion a year ago. The USPS has warned it could be forced to default on payments due to the federal government by the end of its fiscal year in September.

In an attempt to stave off default, the postal service plans to shutter 3,700 post offices and lay off up to 120,000 employees by 2015 providing Congress gives it the right to override worker contracts.

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