Go Electric Mail: Some Thoughts On Electrifying the U.S. Postal Fleet.

By Bill Moore

Posted: 04 Feb 2010

It's called HR 4933 and the above chart, courtesy of E-Drive.Org, wants to allocate up to $2B to begin the long overdue process of converting a gasoline-dependent Post Office from molecules to electrons, just like we did with e-mail.

The problem is, the U.S. Postal Service is broke. According to the Government Accounting Office is lost $2.8 billion in fiscal year (FY) 2009 and nearly double that in 2007. Reports the GAO, "USPS debt increased at the end of fiscal year 2009 by the annual statutory limit of $3 billion, bringing outstanding debt to $10.2 billion. At this rate, USPS will reach its total $15 billion statutory debt limit in fiscal year 2011."

A large part of the problem is we don't mail letters anymore, or not nearly as many as we used to. Blame e-mail and online bill pay; and my wife and I are as guilty as the next household. As for mail arriving at my home, most of it is advertising circulars and the odd bill. A lot of my business mail arrives at my Post Office box, which I pick up a couple times a week. Much of my personal and professional correspondence has now moved online.

So, the question is, do we even need a postal service anymore? Of course, the answer is yes, but maybe not as we currently think of it. The Postal Service is as aware of this problem as anyone and is exploring ways to resolve it in a cost effective way that makes use of its strengths, like its 37,000 facilities, more than McDonalds, Starbucks and Wal-Mart put together. The watchdog groups Citizens Against Government Waste points out...

...postal officials have been trying to cobble together a salvation strategy that creatively leverages that “bricks and mortar” infrastructure by giving postal customers the opportunity to conduct other government businesses at existing post offices, a convenience-store approach to government services.  In order to do that, the USPS would need Congress to make statutory changes giving them the necessary authority to conduct business and collaborate with other government entities. 

Unfortunately, postal officials also have their sights set on venturing outside of their core mission of providing postal products or even access to multiple government services in one location.

Despite libertarian calls for smaller government, there are certain basic functions of society that require public oversight and administration lest the overly aggressive cocktail of human nature and free[booter] enterprise called capitalism would soon turn all corners of society into a corporate-run plutocracy: the free flow of information being as important a human right as "life, liberty and the pursuit of happyness." To put a slightly different twist on the "too big to fail" mantra, there are some functions of government we don't want "going bankrupt," our sewer and water service, our police and fire departments, our highway maintenance departments, our military and, yes our postal service. The Post Office is one of the few agencies of government explicitly authorized by the Constitution. So, while privatizing the postal service might sound like a good idea -- and it would require a Constitutional amendment -- the larger question is, do you really want to entrust such a vital part of the nation's commerce and "freedom of speech" into the hands of a board of directors who are unaccountable to the nation?

The problem for the United States Postal Service -- and American citizens -- is that the delivery of those physical forms of communication and commerce, i.e. letters, papers and parcels, has been largely unprofitable since the USPO became the USPS in 1970, after a protracted strike by federal employees. The Nixon Administration resolved the dispute by allowing the creation of the Postal Service, a quasi-independent corporation with a government sanctioned monopoly to deliver the mail in the United States. As the figures above clearly spell out, the numbers haven't added up for years now.

So, how would the electrification of the services 140,000+ delivery vehicles change that situation? Good question.

While the cost of fueling and maintaining the fleet is a significant line item in the budget, it's not the largest. Postal Regulatory Commission Chairman Ruth Goldway estimates the fleet burns some 68 million gallons of gasoline annually. Of the $926 million the Postal Service spent in FY2008 on supplies and materials, most of this was for fuel. $1.39 billion also went to vehicle maintenance of a fleet that is nearing the end of its designed 20-year service life. It makes eminent sense to start thinking seriously about not just upgrading (converting) or even replacing the fleet with new, more efficient, electric-drive vehicles, but also how those vehicles could be even better utilized, providing their communities with services not possible with the current fleet of gasoline-fueled vans.

Let's start with when the vehicles are parked, which is the majority of the day, from late afternoon to early or mid-morning as workers sort mail and prepare their neighborhood deliveries. Small fleets of electric vehicles are plugged into the grid, offering the potential, as has been pointed out by many observers, to provide distributed ancillary services to the grid for at least part of the day. Assume, for example, that an electric postal van is equipped with a 10kWh battery pack, giving it a range of about 30 miles, of which 80% is used during the day. That means the van will need every night a recharge of 8kWh. Assuming a 3kW off-board charging system, the van could be fully recharged in under 3 hours time. If it sits from say 6 pm to 9 am the next morning, that's 15 hours, of which only three are needed to complete the charging process at level two charging rates. Presumably, a fleet of 15 vehicles would be recharged in a staggered fashion over that 15 hour window so as to not overload the local grid.

For one small suburban post office like mine here in Papillion, that represents 120 kWh electrical storage capacity. While that doesn't seem like a lot, multiple that 8kWh by 142,000 and your talking about 1,136 megawatts hours of distributed capacityfor which the power industry is willing to buy on an hourly basis as part of its regulation services at a current rate of between $30-40 per megawatt hour. This means that theoretically, just sitting there, the U.S. postal fleet could be earning more than $400,000 a day, and that's before they even rolled out of the yard to begin their deliveries.

Now all that isn't pure profit, of course. This will likely have some impact on the service life of the battery pack, but regulation services is not the same as peak load services. It is of far shorter duration and less depth of discharge.
From an operational cost perspective, refueling my local post office fleet (I am guessing we have maybe 15 total) with grid power at the national average of 10¢ a kWh (locally we pay under 7¢/kwh) will cost my local post master $12 as opposed to the $108/day bill he probably pays now (based on 15 vehicles traveling 20 miles each and burning fuel at 8 mpg, while paying $2.89/gal.)

When those E-mail Vans roll out of the yard, what else can they be doing that their current gasoline stable mates can't? They're generating no local air pollution for one, a difficult intangible to put an exact dollar number to, but valuable, nonetheless. With the proper signage, they could also be doing valuable public education, something more easily measurable since people buy advertising space all the time on buses and the like. In this case, the signage on each delivery vehicle could be a rolling billboard, not for commercial advertisers, but for the Postal Service, itself: promoting a range of current and future products and services like at-home parcel pick-up that includes online tracking.

One of the first things I recommend promoting is what I call the "Go Electric Mail" program. The Post Office would issue a special first class stamp, priced as say a $1, the proceeds of which would help pay for the electrification program itself. I conducted a survey a couple months back asking readers if they'd be willing to pay more for a first class stamp if the money were used for this purpose. 75% responded that they would. That's encouraging. I've already made this suggestion to Chairman Goldway, among others.

In that communication to her, I also suggested another funding mechanism that harkens back to the days of World War II and its War Bond drives. If not prohibited by Congress, could the USPS offer bonds that are eventually paid for by the fuel savings I just described above? These could be available at your local post office and payable, with interest, in 10 years or whatever makes since financially. One of the big selling points would be, like the war effort more half a century ago, its patriot appeal, not to help fund the destruction of our enemies to be bolster and improve the nation's industrial competitiveness. After all, an order for 140,000 electric vehicles and their accompanying chargers and spare battery packs would be a nice shot in the arm for the industry.

There are probably other ways that the "Go Electric Mail" -- as opposed to e-mail -- would generate new revenue opportunities for the service, ones that won't manifest themselves until vehicles are actually deployed. If you can think of others, please share them here. I know the staff at the Postal Regulatory Commission reads EV World -- and even contributes from time to time -- so your suggestions will be noticed.

ADDENDUM: A Reader's Perspective

Donald Baer in Washington State also has been thinking about the advantages of converting a significant fraction of the U.S. Postal Service fleet over to electric and came up with some interesting numbers after having a conversation with his own mailman. Here is what he wrote me.
Setting politics aside, we should all recognize that when you spend more money than you make, then you are headed for trouble. This applies to the Federal Government as well as for individuals. The best advice in most instances is to cut spending. That is where the problem starts to get political. I want to address solutions that are not political in nature, but sensible ideas that EVERYONE can support.

The sensible idea is to look for the big items in the budget.

Here in Washington State, my postal carrier drives an internal combustion engine delivery truck. He turns it on in the morning, and except for when he eats lunch the engine runs the entire time he is out and about until he parks it on returning to the terminal at the end of his shift. Say, 7 hours. Now imagine if it were an electric truck, every time he stopped for whatever reason, to put mail in to the mail box, etc, the motor automatically stops - shuts off. Furthermore, the energy to run an electric motor on average, only costs about 2½ cents per mile not the 57 cents per mile it costs now plus oil changes, tune ups, engine replacement, etc. In our area most of our electricity is hydro electric generated and more capacity will be available by wind generation.

My understanding is that there are about 140,000 US Mail carrier vehicles in the US. For argument purposes 100,000 are used in urban environments. Typically, my route delivery carrier says he fills his truck every third day after driving about 75 miles. Extrapolating this to all 100,000 +/- carriers these are the numbers:


100,000 trucks x 25 miles/truck x 304 working days = 760,000,000 Total Fleet Miles/year

75 miles in three days/16 gallons consumed = 4.69 miles/gal

760,000,000/4.69 miles/gal x 2.75$/gal = $446,000,000 rounded - just short of a half billion dollars

vs.

.025/mile x 760,000,000 = $ 19,000,000 per year for an all electric vehicle fleet savings of $427,000,000
That is a REAL savings - almost a half a billion dollars. That would buy a lot of replacement trucks.

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