Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Three lawsuits have been filed to force the US Postal Service
(USPS) to review its plan to modernize the largest government-owned
fleet in the nation with gasoline-powered vehicles rather than
electric vehicles (EVs).
In the lawsuits by state attorneys general, climate groups, and
a labor union, the USPS plan was called a missed opportunity to
reduce vehicle emissions, support the transition to electrified
transportation, and save money on fuel and maintenance costs.
The Next Generation Delivery Vehicle
Acquisitions Program record of final decision was published on
23 February, setting the wheels turning on a plan to buy up to
165,000 vehicles over 10 years from Oshkosh Defense, a company with
EV manufacturing experience limited to electric fire trucks and
other highly specialized applications.
On 24 March, the purchase of 50,000 vehicles from Oshkosh
Defense for $2.98 billion was announced, of which 10,019 would be
battery EVs. That leaves 80% as internal combustion engines
(ICE).
The plan was widely criticized by environmental and climate
groups, Democrats in Congress, and EV companies when it was
proposed in February 2021 by Republican-appointed Postmaster
General William DeJoy as out of step with the nation's priorities
and needs. And the chorus continued when the contract was
signed.
"In general, USPS acquiring gasoline vehicles is at odds with
the executive order from President Biden … for agencies to acquire
ZEVs for federal fleets. We are seeing many government agencies
trying to comply with the goals. It's perplexing," said Scott
Hochberg, Center for Biological Diversity (CBD), in comments to
Net-Zero Business Daily. CBD is the plaintiff in one of the
lawsuits.
In December 2021, Biden issued an executive order calling for all
federal light-duty vehicle acquisitions to be ZEVs by 2027 and all
acquisitions to be ZEVs by 2035.
Biden also set a goal of 50% of new cars sold in the US
be electric by 2030, and he's pledged to install 500,000 chargers
nationwide by that year. The bipartisan infrastructure bill he
pushed for and signed in 2021 includes $5 billion for states to
install chargers and another $2.5 billion for local grants.
But none of that stopped USPS from moving ahead with a
gasoline-powered future. The 50,000 vehicles will be delivered in
2023 through 2027, according to testimony before the US House of Representatives
Committee on Oversight and Reform on 6 April by Next
Generational Delivery Vehicle Executive Director Victoria
Stephen.
Stephen said that $482 million has been authorized for Oshkosh
Defense, though she said "only a small fraction" of that has been
paid yet. Oshkosh is setting up an assembly line in a facility it
is building in South Carolina.
The lawsuits ask federal courts to stop future payments and to
force the postal service to conduct a new environmental review
before resuming the contract. "Once the postal service does that,
it will be abundantly clear they will need to purchase EVs,"
Hochberg said.
The reluctance on the part of postal service leaders to move
aggressively into EVs seems even to have surprised the Postal
Service's own Office of the Inspector
General. It released a report in March 2022, shortly after the
DeJoy plan was finalized, that concluded that the payback period
would be 10-17 years to cover the higher initial cost of purchase
of EVs and the need for charging infrastructure, depending on
various assumptions.
"Our research confirms that electric vehicle technology is
generally capable of meeting the Postal Service's needs," the
report said. "Electric vehicles are generally more mechanically
reliable than gas-powered vehicles and would require less
maintenance. Energy costs will be lower for electric vehicles, as
using electricity to power a vehicle is cheaper than using
gasoline."
Missed opportunity
The size of the postal fleet and the way in which it's used make
it ideal for electrification, said Hochberg. At about 212,000
vehicles, the postal service is the largest fleet in the
government, and having it lead the way on electrification would
send a message about government priorities on climate and health,
he said.
But it's about more than messaging, Hochberg added. "These
delivery vehicles go to almost every house in America—and, more
important, they idle outside houses…[creating] a direct pipeline of
tailpipe pollution into every community every day," he said. "These
purchases would guarantee that would continue for decades to
come."
He called the postal fleet "low-hanging fruit" in transport
electrification because the delivery vehicles charge at central
locations every night. Analysis by the postal service inspector
general found that most drivers run routes that average about 24
miles per day, thus eliminating any issue of range. "This should be
ground zero for electric vehicles," he said.
At the same time, the large volume of potential sales would be
invaluable for promoting new advances in EV production, said Joe
Britton, executive director, Zero Emission Transportation
Association (ZETA).
"The entire automotive industry has been constrained by
post-pandemic and other supply chain bottlenecks from global
instability, but that is why it is so important to take federal
action to invest in transportation electrification," Britton told
Net-Zero Business Daily. "Our ability to scale production
can be accelerated if we have strong market signals proving out
durable demand, whether through tax credits or federal buyers like
USPS."
Aging fleet
Driving the USPS' decision is a fact on which all parties agree:
it's time to update the fleet. The majority of the postal service's
approximately 141,000 long-life vehicles (LLVs), ie. mail trucks,
were built between 1986 and 1994. Most lack air conditioning, and
all lack advanced safety features such as airbags and 360-degree
collision cameras—all of which will be installed in the new
LLVs.
The old delivery trucks "are now beyond their intended service
life and becoming increasingly expensive to operate and maintain,"
USPS said, with costs averaging at least $5,000 per year per
vehicle. That's about $700 million per year just to keep the old
vehicles in operation. The postal service's "no action" plan, which
it rejected, would be to continue to service those vehicles and not
replace those that are too costly to fix.
In addition to air conditioning, improved ergonomics for driver
comfort, and safety features, the new generation of LLVs will
reduce emissions, the postal service said. The current fleet has an
average fuel efficiency of 8.2 mpg. The new fleet is expected to
achieve 14.7 mpg when air conditioning is not used and 8.6 mpg when
it's operating.
Given the 1.2 billion miles driven per year, the postal service
said that the replacement fleet of 90% ICE vehicles and 10% BEVs
would emit 309,270 metric tons (mt) of CO2 per year. This would be
258,000 mt/year lower than the "no action" alternative, USPS
said.
Those emissions declines continue the agency's own climate
activities, said Stephen in her congressional testimony. The
service's target is to reduce its GHG emissions by 30% by fiscal
year 2025 from its 2008 baseline, and through 2019 it had achieved
a 28.3% reduction, she said.
Flawed analysis
While not disputing the benefits of replacing aging LLVs,
climate advocates, federal government agencies, and the postal
service inspector general seem to dispute almost every other part
of the analysis.
The White House Council on Environmental
Quality said the final environmental impact statement
"warrant[s] further examination" and recommended a supplemental
review.
The US Environmental Protection Agency (EPA) sent a comment
letter to the postal service when the draft environmental review
was published. EPA put the emissions of the 90/10 plan at 975,534
mt of CO2 per year, or more than three times the level that the
postal service calculated. Much of this is because it found the
postal service overestimated the fuel economy of the new vehicles
by not taking into account the impact of vehicle air conditioning
use.
"A 10% commitment to clean vehicles, with virtually no fuel
efficiency gains for the other 90%, is plainly inconsistent with
international, national, and many state greenhouse gas emissions
reduction targets, as well as specific national policies to move
with deliberate speed toward clean, zero-emitting vehicles," EPA
wrote in its comment letter.
One of the key claims raised in the lawsuits references the
alleged flaws in USPS' emissions analysis as pointed out by EPA and
other analyses.
Proponents of EVs also said in comment letters and the lawsuits
that the postal service has used a series of assumptions that
unfairly reduce the projected cost of ICE vehicles or raise the
cost of EVs.
In coming to the decision to lean on gasoline engines, the
postal service said that buying ICE vehicles is cheaper than buying
EVs on a total cost of ownership basis over 20 years. In its final
environmental impact statement, it said buying and operating 75,000
battery EVs would cost $11.6 billion (in 2020 dollars) over 20
years, whereas buying and operating 75,000 ICE vehicles would cost
$9.3 billion, it said.
USPS cited the greater initial expense of the vehicles and the
need to install approximately 17,000 charging stations as
primary drivers of those higher costs. It said that the elimination
of the need to buy gasoline for those vehicles did not recover all
of those costs.
"Our statutory mission is to provide universal postal services
in a financially self-sufficient manner. Fleet electrification is a
near-term opportunity, but not a mission-critical one," Stephen
told Congress. "Our ambition can also include electrification, but
it should not come at too severe a cost, nor should it interfere
with other operational and financial objectives."
But her assertion about comparative costs contradicts analysis
published in August 2021 by Atlas Public Policy, an analytics firm,
that found 97% of the USPS fleet can be replaced by EVs at a saving
of $4.3 billion by 2030 over the lifetime use of the vehicles,
primarily thanks to fuel cost savings.
At this moment of high gasoline prices in the US, critics say
the balance is tipping even more strongly towards EVs. The postal
service used a gasoline price forecast from the US Energy
Information Administration (EIA) that was made during the depth of
the COVID-19 economic downturn in spring 2020. At the time, the
average retail price of gasoline was about $2.19/gal, and EIA
projected staying in a range of $2.21-$2.36/gal (in 2020 dollars)
through 2030. Currently, the average retail price is $4.20/gal,
according to AAA.
In its final notice about the purchase, the postal service
rejected comments that it should revise the fuel cost assumption.
It said it had conducted a sensitivity analysis of its plan with
gasoline starting at $2.70/gal, which didn't affect its overall
conclusion in favor of the 90/10 purchase plan.
Beyond the matters of emissions and fuel costs, the multiple
lawsuits laid out a litany of errors and omissions in the USPS
analysis that violate the basic rules set down in the National
Environmental Policy Act (NEPA). The lawsuits say that the analysis
ignored recent advances in EV range and underestimated future
performance improvements and price reductions.
In essence, the lawsuit by 16 state attorneys general in
the US District Court for the Northern District of California, led
by California's Rob Bonta, said that USPS fell far short of the
"hard look" required under NEPA. They said that courts have
required a careful review for purchasing decisions that are
"transformational [in] nature … [with] significant environmental
and public health implications."
Their primary complaint includes USPS not considering more equal
shares of ICE and EV purchases than the 90/10 or 0/100 options. The
postal service said that it's open to greater EV purchases as cost
and technology improve, as shown by its initial decision that 20%
of its first 50,000 LLVs will be electric.
Another set of complaints centers around the performance of
vehicles analyzed by the postal service. For example, the postal
service said that its relatively heavy vehicles will need a battery
of 94 kWh, or more than twice the 45 kWh that's on a typical
light-duty vehicle today. That will not only raise the cost of an
LLV, but that heavy vehicle will have a range of only 70 miles on a
charge, USPS said.
But the Ford E-transit van, which is
operating commercially, has weight similar to the LLVs, and it's
run by a 68 kWh battery and has a range of 126 miles on a charge,
according to the company.
The lawsuit from environmental
groups said this performance also undermines the postal
service's claim that 6% of its routes, approximately 12,500 of
them, cannot be serviced by EVs because they are 70 miles or more.
The postal service's claim doesn't jibe with its Office of
Inspector General's findings either, which concluded that only 1.5%
of postal routes are longer than 70 miles, and that even most of
the longer routes can be served by EVs.
For real-world evidence that the postal service's outlook is
wrong, ZETA's Britton pointed to private delivery fleets. "The
Postal Service's main competitors—including UPS, FedEx, Amazon,
DHL, Walmart, and more—are all electrifying because they
understand that zero-emission delivery fleet vehicles are good for
public health, the environment, and their bottom lines," Britton
said.
In testimony before the House Oversight Committee, Britton said
UPS has ordered 10,000 delivery vans from Arrival, and DHL has
electrified 20% of its fleet and says it's on its way to a 70%
electric fleet by 2025.
Outlook
Even as courts consider whether to hear the complaints, it's
possible that other factors will influence the postal service's
actions. Already, pressure seems to have moved it from its initial
10% EV plan to 20% in its first 50,000-vehicle purchase.
Second, a change in federal law has relieved the postal service
of much of the financial pressure that has limited its
infrastructure spending for nearly two decades. The service's
massive debt was cited numerous times by officials as a reason for
preferring gasoline vehicles (if one grants that they are less
costly to own and operate). In March, Biden signed the Postal
Service Reform Act, which will save the service an estimated $50
billion over 10 years by removing a requirement put in place by the
Republican-controlled Congress in 2006 that the service pre-fund
all retiree benefits, unlike every other federal agency.
Given that financial lifeline, Britton told Congress that he
believes "USPS should be in a much stronger position now to make a
short-term investment that will lead to long-term cost
savings—and that will dramatically benefit the American
people."
Third, Democrats are interested in providing more funding for
USPS to get into the EV game. The version of the Build Back Better bill passed
in the House in November included $2.5 billion for USPS to buy
electric vehicles and another $3.4 billion for charging
infrastructure at postal buildings. While Build Back Better died in
the US Senate in December, if it's revived, those funds could again
be available.
{"items" : [
{"name":"share","enabled":true,"desc":"<strong>Share</strong>","mobdesc":"Share","options":[ {"name":"facebook","url":"https://www.facebook.com/sharer.php?u=http%3a%2f%2fcleanenergynews.ihsmarkit.com%2fresearch-analysis%2fus-postal-service-hit-with-three-lawsuits-over-slowwalk-approa.html","enabled":true},{"name":"twitter","url":"https://twitter.com/intent/tweet?url=http%3a%2f%2fcleanenergynews.ihsmarkit.com%2fresearch-analysis%2fus-postal-service-hit-with-three-lawsuits-over-slowwalk-approa.html&text=US+Postal+Service+hit+with+three+lawsuits+over+slow-walk+approach+to+EVs+%7c+IHS+Markit+","enabled":true},{"name":"linkedin","url":"https://www.linkedin.com/sharing/share-offsite/?url=http%3a%2f%2fcleanenergynews.ihsmarkit.com%2fresearch-analysis%2fus-postal-service-hit-with-three-lawsuits-over-slowwalk-approa.html","enabled":true},{"name":"email","url":"?subject=US Postal Service hit with three lawsuits over slow-walk approach to EVs | IHS Markit &body=http%3a%2f%2fcleanenergynews.ihsmarkit.com%2fresearch-analysis%2fus-postal-service-hit-with-three-lawsuits-over-slowwalk-approa.html","enabled":true},{"name":"whatsapp","url":"https://api.whatsapp.com/send?text=US+Postal+Service+hit+with+three+lawsuits+over+slow-walk+approach+to+EVs+%7c+IHS+Markit+ http%3a%2f%2fcleanenergynews.ihsmarkit.com%2fresearch-analysis%2fus-postal-service-hit-with-three-lawsuits-over-slowwalk-approa.html","enabled":true}]}, {"name":"rtt","enabled":true,"mobdesc":"Top"}
]}