USPS Reforms Are Finally in Sight, But Fleet Electrification Lags Behind

New legislation that describes a long-awaited rescue plan for the U.S. Postal Service (USPS) recently passed the House of Representatives, and now the bill heads to the Senate. If House Resolution 3076 becomes law, it will help provide businesses with a more reliable, transparent and efficient platform for conducting commerce. However, considering the value corporate leaders place on decarbonizing their operations, the absence of a robust plan for fleet electrification sticks out like a sore thumb.

What is wrong with the USPS?

The USPS has been challenged in recent years by the rise of electronic communications and for-profit delivery companies, including those associated with e-commerce operations. This evolving landscape, though, is just one among several bottom-line issues confronting the Postal Service.

One of those issues is the 2006 Postal Accountability and Enhancement Act. Signed into law by former president George W. Bush, the 2006 law requires the USPS to pre-pay retiree health care costs over a timeline extending 50 years or more. The long pre-payment timeline is widely viewed as burdensome and unique among all government agencies and private corporations. Though not solely responsible for ongoing financial difficulties at the Postal Service, the pre-payment requirement bears at least some responsibility.

The fleet electrification opportunity

The new legislation is aimed at easing the financial pressure. Among other elements, it provides for operational updates that will enable the USPS to benefit from new revenue streams.

One of the areas not updated by H.R. 3076 is the fuel that powers the Postal Service’s delivery vehicles. That comes under new a contract for delivery vehicles, issued by the Postal Service just last year.

Replacing the USPS fleet is long overdue. It is dominated by the “Long Life Vehicle” (LLV) local delivery truck produced by Grumman beginning in the 1980s, and now those vehicles are limping towards the end of their lifespans.

As a purpose-built vehicle tailored to post office specifications, the LLV represented a cost-saving improvement over previous Postal Service procurement policy, which relied on Jeeps and other off-the-shelf vehicles. As the name suggests, the LLV savings was largely thanks to the extended lifespan of the vehicles. Unfortunately, in recent years the LLV has come under fire for being out of date, the absence of airbags and air conditioning, being among the most serious shortcomings.

The new contract provides the Postal Service has a golden opportunity to update delivery truck features and catch the fleet electrification trend, too – or not, as the case may be.

The fleet electrification failure

Unfortunately for fleet electrification advocates, the new contract barely scratches the EV surface. The multi-year deal engages the longtime defense suppler Oshkosh Defense to produce up to 165,000 new vehicles, with only 10 percent estimated to deploy battery-electric technology.

Postmaster General Louis DeJoy has indicated that additional EVs could be forthcoming, if Congress approves additional funding to cover the higher up-front costs. Still, his failure to prioritize electrification has come under withering fire from fleet electrification advocates. Though EVs generally cost more than conventional vehicles up front, the fuel and maintenance savings add up over the years.

Competing deliver fleets are already beginning to electrify, and some are taking steps to ensure access to an ample supply of EVs by cementing relationships with auto manufacturers.

That includes Amazon, which has invested in the EV startup Rivian, and UPS, which established a partnership with the EV manufacturer Arrival in 2020.

In an interesting twist, DeJoy has reportedly owned stock in UPS and at least two other electrification-friendly firms in the delivery services field.

That includes the company XPO Logistics, which began a fleet electrification pilot program involving several Daimler battery-electric heavy duty trucks last year. The program is aimed at helping Daimler refine its EVs for widespread adoption, in addition to informing XPO’s own fleet electrification plans.

Next steps for a cleaner USPS vehicle fleet

H.R. 3076 enjoyed strong bipartisan support in the House, along with the support of labor unions and DeJoy himself, so its chances of passing the Senate seem good.

Meanwhile, some members of Congress have been taking DeJoy’s request for additional EV funding to heart. Last May, Representative Stephen F. Lynch of Massachusetts District 10 sponsored H.R. 3521, the Postal Service Electric Fleet Authorization Act of 2021. The bill would authorize $8 billion in funding for new EVs. Representative Jared Huffman of California District 2 also introduced the Postal Vehicle Modernization Act of 2021 (H.R. 1636) would make EV acquisition a requirement, contingent on $6 billion in funding.

Even if extra funding is not forthcoming, additional pressure from fleet electrification advocates – including President Joe Biden – could motivate the Postal Service to work with Oshkosh Defense on including more EVs in the current contract.

Oshkosh Defense has already stated that its new Postal Service delivery vehicle is designed to accommodate both internal combustion engines and fleet electrification into account, depending on which direction DeJoy wishes to go.

Lower operation and maintenance costs for EVs, along with falling up-front costs, should also help make the case for electrification over fossil energy. The current fuel price spike also underscores the additional bottom line disadvantage of continuing to rely on the fossil energy supply chain.

Business stakeholders can help motivate action on a more ambitious fleet electrification program for the Postal Service, by contacting their elected representatives and advocating decarbonization as part and parcel – so to speak – of a comprehensive effort to restore the Postal Service to long-term financial stability.

Image credit: Diego De Alba via Unsplash