EHS Management, Sustainability

USPS Fleet Purchasing Decision Draws Criticism

On February 23, 2022, the U.S. Postal Service (USPS) issued a record of decision (ROD) and announced it will move ahead with plans to purchase 148,500 new gasoline-powered vehicles over the next decade in spite of Biden administration objections.

The decision is the result of the USPS’s completion of its Environmental Impact Statement (EIS) on its Next Generation Delivery Vehicle (NGDV) Acquisitions program.

The announcement shares the details of an estimated $6 billion, 10-year contract with Oshkosh Defense “to manufacture a new generation of US-built postal delivery vehicles that will drive the most dramatic modernization of the USPS fleet in three decades.”

“Under the contract’s initial $482 million investment, Oshkosh Defense will finalize the production design of the [NGDV] — a purpose-built, right-hand-drive vehicle for mail and package delivery — and will assemble 50,000 to 165,000 of them over 10 years,” states a USPS news release. “The vehicles will be equipped with either fuel-efficient internal combustion engines (ICE) or battery electric powertrains and can be retrofitted to keep pace with advances in electric vehicle technologies. The initial investment includes plant tooling and build-out for the U.S. manufacturing facility where final vehicle assembly will occur.

“The contract is the first part of a multi-billion-dollar 10-year effort to replace the [USPS’s] delivery vehicle fleet, one of the world’s largest … [with] more than 230,000 vehicles in every class, including both purpose-built and commercial-off-the-shelf (COTS) vehicles. Approximately 190,000 deliver mail six, and often seven, days a week in every US community. The NGDV, along with other COTS vehicles, will replace and expand the current delivery fleet, which includes many vehicles that have been in service for 30 years.”

The new vehicles will have air conditioning and heating and offer increased cargo space, 360-degree cameras, front- and rear-collision avoidance systems, and automatic braking.

At least 10 percent of the purchase in the contract with Oshkosh includes battery electric vehicles (BEVs), states the EIS. The USPS expects Oshkosh to deliver the first 5,000 BEVs to go into service in 2023, when they are estimated to travel nearly 944,000 miles annually, reports Federal News Network.

“Vicki Arroyo, EPA’s Associate Administrator for Policy, said in a statement that USPS’s plans to purchase tens of thousands of gasoline-powered delivery trucks over the next decade ‘locks USPS into further oil dependence, air pollution and climate impacts for decades to come, and harms the long-term prospects of our nation’s vital mail provider.’

“‘The Postal Service’s current course represents a crucial lost opportunity to be a leader in reducing the carbon footprint of one of the largest government fleets in the world,’ Arroyo said,” according to Federal News Network.

Arroyo added that the USPS “‘conducted a fundamentally flawed environmental analysis that underestimates the costs of gasoline-fueled vehicles and overestimates the costs associated with electric vehicles.’”

Fuel efficiency

The USPS EIS states that the new ICE vehicles are expected to achieve only 8.6 miles per gallon (mpg), which is only a .4 mpg improvement over its current decades-old Workhorse vehicles.

“Electric vehicle experts said the industry standard for a gasoline-powered fleet vehicle is between 12 and 14 mpg,” notes The Washington Post.

With transportation being the single largest source of U.S. greenhouse gas (GHG) emissions, BEV proponents hoped the USPS fleet purchase would provide an economic boost for the industry.

“EPA estimates show the greenhouse emissions from the Postal Service’s new gas-powered trucks would total nearly 20 million metric tons over the vehicles’ projected 20-year life span, roughly equaling the annual emissions from 4.3 million passenger vehicles,” The Washing Post adds. “Environmental groups have questioned the Postal Service’s claim that the electric Oshkosh trucks could only travel 70 miles per charge. Although the market for commercial electric vehicles is still young, most of the electric delivery vans being snapped up by the Postal Service’s competitors have a driving range of well over 100 miles. The Oshkosh truck would run on a battery similar in size.”

NEPA review

The National Environmental Policy Act (NEPA) requires federal agencies to consider the environmental consequences of proposals, document their analysis, consult with other applicable agencies, and make the information available for public comment before the proposals are implemented. The Act applies to projects and programs financed fully or partially by federal agencies.

Before the USPS announced it was moving ahead with the current Oshkosh contract, both the EPA and the White House Council on Environmental Quality (CEQ) sent letters criticizing the USPS’s EIS and urging it to reconsider more BEVs for its initial purchases.

Motor Trend magazine says the EPA’s 13-page letter contained a lengthy list of complaints:

  • “The deal did not follow the appropriate process outlined by the [NEPA] and was awarded prior to the review process outlined by NEPA.
  • The Postal Service ‘executed a contract, including the award of $482 million, before any analysis of the environmental impacts of the project as required by NEPA.’
  • The contract’s [EIS] left out critical information and underestimated [GHG] emissions from its new [ICE] vehicles, while overestimating emissions from BEVs, compared to EPA analysis which was provided to the Postal Service.
  • The Postal Service’s own analysis showed nearly 95-percent of mail carrier routes could be electrified, but only allocated 10-percent of electrified vehicles.
  • The Postal Service did not publicly disclose the Total Cost of Ownership (TCO) for the new vehicles in the EIS.
  • ‘The TCO report analysis that served as the basis for the Postal Service’s selection … is not transparent and is potentially flawed and out of date.’
  • The TCO ‘did not consider the financial risk from near complete reliance on petroleum-based fuels with volatile prices.’
  • The EIS failed to consider a single alternative to the accepted proposal, but outlined a 100-percent BEV fleet as completely unfeasible.
  • The EIS inadequately regards the impact on communities and environmental justice concerns.
  • The current contract is ‘a crucial lost opportunity to more rapidly reduce the carbon footprint of one of the largest government fleets in the world.’
  • The current contract violates ‘Executive Orders 140086 and 140377 and their policies, in addition to the U.S. economy-wide target under the Paris Agreement to reduce net greenhouse gas emissions to 50-52 percent below 2005 levels by 2030, consistent with achieving net zero emissions by 2050.’”

“The letter also cites concerns over the Postal Service’s major competitors, like Walmart, FedEx, and UPS, committing to fully electric U.S. fleets by 2040 to 2050 with significant near-term fully electric vehicle fleet purchases already made. The Biden administration, through the EPA, is pushing for a much larger chunk of the Postal Service fleet to be fully electric than the 10 percent that is currently proposed.”

Supplemental EIS

In the CEQ’s letter to the USPS postmaster, chair Brenda Mallory wrote, “The [EPA] has communicated grave concerns with the adequacy of the environmental review that the USPS has conducted to date for its procurement of its NGDV, which EPA has detailed again today in a letter to your agency. Those concerns warrant further examination by USPS, and I join EPA in urging USPS to complete a supplemental environmental impact statement (SEIS) to remedy the deficiencies in the [EIS]. With some additional time and work, I am confident that the USPS can swiftly incorporate the kind of up-to-date information on electric vehicle technology, cost, and deployment that USPS’s competitors are using to inform their own business decisions to electrify their fleets. … EPA has identified the reasons that it finds the analysis to be deficient and what USPS must do to improve its analysis consistent with making sound decisions informed by accurate data. As an independent agency that is bound by NEPA, the responsibility now falls on the USPS to improve its NGDV environmental review and make a decision that is grounded on sound legal footing; if it does not do so, Congress or the Federal courts may compel USPS to alter course.”

In its 340-page ROD, completed in December, the USPS states the agency has already addressed concerns raised by the EPA and the CEQ.

“USPS Vice President for Supply Management Mark Guilfoil said the agency received more than 39,000 public comments about its next-generation delivery vehicle fleet. He said USPS also welcomed feedback from the EPA and other agency partners as part of its obligations under [NEPA],” Federal News Network says.

“‘As a result of those comments, we included extensions in the process timeline as requested by EPA. After thorough review and study, we determined that EPA’s request for a supplemental EIS and public hearing would not add value to the Postal Service’s already year-long review. It is also important to note that a supplemental EIS and public hearing are not legally required,’ Guilfoil said,” Federal News Network continues.

“That EPA disagrees with the Postal Service’s conclusions does not change the fact that the Postal Service’s analyses and assumptions are reasonable, based on credible sources, and reflect the Postal Service’s superior expertise and extensive experience in the field of postal logistics and procurement,” states the USPS ROD.

“USPS concludes there is no legal or other basis to delay the NGDV program,” a USPS news release says.

Retrofitting

In response to initial criticism, USPS Postmaster General and CEO Louis DeJoy countered with information that the new ICE vehicles could be retrofitted later to convert them to electric vehicles, The Washington Post says.

“Even if we were to roll out the door with an internal combustion engine in the vehicle, we have the opportunity, the way the vehicle is designed is to allow us at the end of the life of that engine to swap in a different drive train alternative,” said Scott Bombaugh, the USPS’s chief technology officer, in a March 21 interview with The Washington Post.

However, in its ROD, the USPS stated it “has no plans to retrofit any vehicles.”

Cash flow

“Our commitment to an electric fleet remains ambitious given the pressing vehicle and safety needs of our aging fleet as well as our dire financial condition,” DeJoy said in a February 6, 2022, news release. “The proposed action, which we are evaluating under the [NEPA], includes an initial order plan for 5,000 electric vehicles, and the flexibility to increase the number of electric vehicles introduced should additional funding become available. Absent such funding, we must make fiscally responsible decisions that result in the needed introduction of safer and environmentally cleaner vehicles for the men and women who deliver America’s mail.”

“The Postal Service is … flush with cash,” The Washington Post states. “It reported $23.9 billion in liquidity — much of it thanks to emergency pandemic funding from Congress — at the end of fiscal 2021.”

However, the agency’s reported debt exceeds $200 billion, which is expected to be the subject of an upcoming House vote to determine whether to relieve the agency of much of that debt.

The Washington Post article adds that “individuals said postal officials privately worry that an ugly spat over its environmental record could spur congressional Democrats to delay the vote.”

“While we can understand why some who are not responsible for the financial sustainability of the Postal Service might prefer that the Postal Service acquire more electric vehicles, the law requires the Postal Service to be self-sufficient,” agency spokeswoman Kimberly Frum said in a statement, according to The Post.

DeJoy says the Agency will continue to seek more funding “from either internal or congressional sources” to fund more BEV purchases.

“USPS said it recently discussed with Congress the possibility of making as much as 70% of its next-generation fleet electric vehicles within a decade, if lawmakers were able to provide the necessary funding,” Federal News Network continues.

The letter from the CEQ refers to $6 billion in legislative funding flagged for the USPS from the Build Back Better Act, which seems a bit disingenuous, as the Act is stalled in the Senate and seems unlikely to be passed without a great deal of modification.

The contract award to Oshkosh is “an indefinite delivery, indefinite quantity (IDIQ) contract, meaning that after an initial dollar commitment, the Postal Service will have the ongoing ability to order more NGDV over a fixed period of time,” states the February 23, 2022, USPS news release. This means the Agency could shift to ordering more BEVs in the future if alternative funding is secured.

Bumpy road ahead

“Over the past week, environmentalists and California’s top air quality regulator have called on the EPA to block the Postal Service from moving forward with what they described as a poorly thought-out purchase that would harm communities across the country,” The Washington Post says. “They asked the EPA to refer the dispute to the [CEQ], which mediates disagreements between federal agencies over actions affecting the environment and public health.

“EPA officials declined to invoke this rarely used power. Instead, senior administration officials, who spoke on the condition of anonymity to discuss internal deliberations, said they decided to send the warning letters to the Postal Service to give its leadership a chance to voluntarily change course.”

The USPS decision to move ahead with the ICE purchases has environmentalists across the country up in arms.

Earthjustice received more than 20,000 individual comments on the nonprofit’s website portal regarding the USPS announcement.

“DeJoy’s plans for the postal fleet will drag us back decades with a truck model that gets laughable fuel economy. We may as well deliver the mail with hummers,” said Adrian Martinez, senior attorney on Earthjustice’s Right to Zero campaign, in an Earthjustice press release. “DeJoy’s environmental review is rickety, founded on suspect calculations, and fails to meet the standards of the law. We’re not done fighting this reckless decision.”

The Washington Post says Martinez believes environmental groups have a strong case.

“It is hard to predict what courts will do, but the Postal Service’s work here is just so embarrassingly flimsy,” Martinez says. “They don’t reveal the source of the information for many of their conclusions, instead dismissing electrification outright.”