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Sunday, January 29, 2023

Congress Should Not Interfere With Mail Truck Purchases

Editor’s note: Written by Paul Steidler, a Senior Fellow with the Lexington Institute, a public policy think tank based in Arlington, Va. This is one in a series of periodic guest columns by industry thought leaders.

The U.S. Postal Service is in dire need of a clean, modern, and customized mail truck fleet and after rigorous and careful study has a sensible plan to get there. But Congress could mess this up and create additional problems by demanding an all-electric, non-emitting fleet as soon as possible while also imposing huge mandates on USPS which will needlessly cost the American people billions.

In a May 11 letter to President Biden, more than 50 lawmakers said, “There has never been a more critical time to ensure that all federal vehicles produce zero emissions, including the over 228,000 delivery vehicles operated by the Postal Service.”

Left unchecked, the practical consequences of such strident demands and accompanying legislation will be USPS having an even dirtier fleet in three years than it does today, longer delivery times for the American people, and tougher operating conditions for postal workers.

First, the good news. On February 23, following nearly six years of study, USPS announced it awarded a contract to Oshkosh Defense to provide 50,000-165,000 Next Generation Delivery Vehicles (NGDV) over the next 10 years to deliver mail and packages.

Today, almost 70 percent of USPS’s more than 200,000 delivery and collection vehicles are between 25 and 32 years old. They were designed to last 24 years.

The current vehicles are antiquated with many lacking air conditioning and modern braking systems. While many delivery vehicles are driven less than 20 miles a day, they are expensive to operate. USPS’s Office of Inspector General found that the “average maintenance costs per vehicle were about $5,000” in 2018, costs which are likely even higher today. Ten thousand vehicles had more than $12,000 in average annual maintenance costs, or more than $120 million annually.

As Trucks.com has thoroughly documented, many USPS vehicles catch on fire. This creates life-threatening situations, and it is fortunate that a postal worker has not already been killed in such incidents. The burning rubber and other metal components create significant environmental havoc.

The new vehicles mean safer and more comfortable trucks for postal workers, more reliable vehicles to better deliver mail and packages, and significantly more environmentally friendly trucks, even if they were to all have modern-day internal combustion engines, which they will not.

Because of politics, though, any announcement that Postmaster General Louis DeJoy made about the new vehicles was likely face criticism. DeJoy, a megadonor who raised money for President Trump and the Republican Party, has drawn the ire of many Congressional Democrats since becoming postmaster general in June 2020.

USPS’s February 23 announcement had an important and often-overlooked statement that should have been welcome news to all, “The vehicles will be equipped with either fuel-efficient internal combustion engines or battery-electric powertrains and can be retrofitted to keep pace with advances in electric vehicle technologies.” Oshkosh Defense is ready to build the vehicles with internal combustible engines or battery-electric powertrains.

In Congressional testimony on February 24 and later, DeJoy has jousted with Democrats demanding more electric vehicles, effectively telling them that more Congressional funds would mean more electric vehicle purchases. This request was made even though Congress gave USPS $10 billion in the December COVID package and USPS already has approximately $26 billion in cash.

The Democrats’ legislation, the Postal Vehicle Modernization Act, introduced by Congressman Jared Huffman (D-Calif.), has plenty of strings attached to the $6 billion. It calls for “each postal service accessible to the public” to have at least “one electric vehicle charging station for use by the public” no later than January 1, 2026.

It also requires that at least half of the medium and heavy-duty trucks purchased by USPS by 2029 be electric or zero-emission vehicles. USPS has approximately 30,000 such vehicles currently.

There are three fundamental reasons why Congressional meddling in the USPS trucks purchase decision will have negative ramifications.

Financially Irresponsible. The 10-year planned procurement will cost an estimated $6 billion that USPS is poised to pay. Under the Huffman proposal, Congress would provide $6 billion to USPS free and clear immediately, for USPS to hold and spend going forward. This is to prevent a Republican-controlled Congress from canceling the program.

But the hidden costs for charging stations, the higher costs for medium and heavy-duty trucks, and the uncertainties associated with large-scale deployment of electric vehicles are substantial.

Threatens to delay the deployment of cleaner trucks. There are often unintended consequences from major legislation. The Postal Service should not in any way be hampered from obtaining as many trucks as quickly as possible. It is critical that the ongoing work to finalize the production design, plant tooling and build out of the U.S. manufacturing facility proceed expeditiously to meet the 2023 target for new delivery vehicles being delivered.

Legislation will lead to wholesale political interference in USPS. The U.S. Postal Service is entirely part of the federal government. Under The Postal Reorganization Act of 1970, however, USPS’s operations have since then been largely protected from political interference. This is because USPS can charge for its services to cover its costs.

If Congress sets the precedent for managing USPS’s fleet it could soon be interfering in pricing and deliveries, returning postal operations to an era of cronyism and inefficiency. Congress, for example, could also expand its micromanagement of 30,000 postal facilities by determining how they should be retrofitted to be more environmentally friendly.

If Congress believes it is in the national interest for USPS to have an all-electric or largely electric delivery fleet, it can pass a resolution expressing this and calling upon USPS to fund the project by asking more from its customers. The users of postal services should pay for postal vehicles.

There is no reason to make the process more complicated than this. And given USPS’s large cash balance, it already has the resources to make such purchases without being saddled with new mandates and Congressional requirements.

Trucks.com welcomes divergent thoughts and opinions on transport technology and trucking industry issues. Use the comments section to cite yours. Qualified opinion leaders are welcome to offer suggestions for opinion columns. Contact info@trucks.com.

Jerry Hirsch June 29, 2021
Electric truck builder Workhorse Group called the U.S. Postal Service’s decision to award a giant contract for the next mail truck to a rival “arbitrary, capricious, and without rational basis” in a legal filing.

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