Postal Service must steer clear of electric trucks
The Postal Service is sputtering out of control. On Nov. 14, the Board of Governors announced that America’s mail carrier lost $6.5 billion in fiscal year 2023. That’s just a drop compared to more than $100 billion in net losses over the past 15 years.
Yet, the agency has not learned its lesson, pushing profligacy to ever-higher gears.
The service is mulling replacing more than 60% of its fleet with electric vehicles, up from the originally proposed 10%. This foolish move will result in higher taxpayer expenses, less reliable vehicles, and even slower mail delivery times. The agency must reverse course and reject wasteful fleet procurement policies.
The fleet of more than 200,000 has seen better days. The average mail truck is more than 20 years old, and spontaneous combustion poses a real safety issue for thousands of agency employees. America’s mail carrier has long tried to kick the can down the road on fleet procurement but finally decided in the past decade to buy 160,000 replacement vehicles.
The challenge has been to purchase these trucks in a cost-effective way that doesn’t result in further net losses. The service initially estimated that 90% of its new vehicles would be conventionally powered while 10% would be electric. That is until Postmaster Gen. Louis DeJoy solicited $3 billion from Congress in exchange for bolstered EV targets.
In recent environmental impact analyses, the service lists its “preferred alternative” as purchasing 65,000 electric vehicles out of 106,480 vehicles — or about 62%). Some commentators have taken the service to task for not considering a 90% to 100% electric fleet. Still, the truth is that even 62% is far too costly and impractical.
As is often the case, the service could have consulted its inspector general’s reporting to get a better idea of the risks and rewards of the procurement. One IG report from March 2022 runs through different scenarios on agency electric-vehicle use with detailed cost and mileage assumptions and finds that the adoption would not be good for postal finances under a wide range of cases. According to the report, an electric fleet would be more expensive than conventional trucks, assuming “an average delivery route length of 24 miles per day, and 301 operating days per year.”
The key here is that electric vehicles are 11% more expensive up-front than conventional counterparts, with cost recoupment possible via reduced energy and maintenance costs. Even these assumptions may be too generous to electric vehicles. In the report, the IG states that “electric vehicles are generally more mechanically reliable than gas-powered vehicles and would require less scheduled maintenance and reduced maintenance costs.”
But, according to an in-depth analysis by analytical firm We Predict, “in a three-month time frame, (electric vehicle) service costs were 2.3 times higher than a gasoline-powered car. At 12 months, (electric vehicle) service costs were still 1.6 times higher. We … found service-related costs averaged $306 per electric vehicle, while a gas-powered car averaged $189.”
Therefore, the assumption that electric vehicles have fewer moving parts and cost less post-purchase may not necessarily be true.
The IG notes some scenarios where 20-year total ownership costs could be lower for electric vehicles than gas-powered trucks, but only if we assume “electric vehicles have lower fuel and maintenance costs per mile.” And, even then, electric vehicles would make sense on less than 10% of mail routes — in the 40 to 70 mile range).
The Postal Service is headed for a pothole with its misguided fleet procurement policies. America’s mail service must shift gears and deliver on affordable mail trucks.