Official Says Funding for Postal Vehicles Must Stem From Congressional Legislation

This story appears in the March 31 print edition of Transport Topics.

A top U.S. Postal Service official said the agency will not ask Congress directly for money to acquire new vehicles.

Instead, Thomas Day, chief sustainability officer for the Postal Service, said Congress must pass postal reform legislation which would give the agency the means to invest its funds to replace an aging fleet.

In an earlier interview with Transport Topics, Day said the agency needs $5 billion to replace its fleet of more than 211,000 delivery vehicles and have any chance of meeting its goal of reducing fuel consumption 20% by 2020.

“As a self-funded agency, the Postal Service would not necessarily be in a position to receive funds from Congress specifically for the acquisition of vehicles,” Day said in a follow-up response to TT last week.

“Financial reform would restore our budget to a place where we can invest our own funds towards vehicle replacement.”

There are numerous postal reform proposals in Congress, but it’s unclear if any will be enacted into law.

In January, Reps. Jared Huffman (D-Calif.) and Gerry Connolly (D-Va.) introduced a resolution in the House of Representatives that would allow the Postal Service to contract with private firms to acquire newer, more fuel-efficient vehicles and use fuel savings to repay the cost.

While Energy Savings Performance Contracts have been used by many federal agencies, including the Department of the Army and the Department of Energy, to retrofit buildings, they haven’t been used for vehicle acquisition, according to Paul Arden, a spokesman for Huffman. “This legislation would clear that up,” he said.

The Postal Service was the first federal agency to award a shared energy savings contract, in 1987 for a lighting retrofit at the general mail facility in San Diego. Under terms of the contract, San Diego Gas & Electric provided a significant rebate that reduced the installation cost, and a contractor invested $164,714 to install new fixtures, ballasts, lamps, reflectors and controls in a 15-year-old, 1.7 million-square-foot, three-building complex. Funds for the upgrade came from projected energy savings of $593,390 over seven years.

The Postal Service has since signed two utility partnership agreements that include an alternative financing mechanism, according to data provided by the Energy Department.

Efforts to reduce facility energy use have paid off for the Postal Service. In its 2012 sustainability report, the agency said it already has achieved its goal of reducing energy consumption by 30% by 2015 compared to a baseline of 2003.

In contrast, the Postal Service has so far failed to meet its self-imposed goal of reducing fuel consumption. The agency used 151.1 million

gallons of fuel for its delivery fleet in 2012 compared with 148.3 million gallons in 2008. Fuel use by contractors and leased equipment was 574.9 million gallons in 2012, a decline of less than 1% compared with 581.4 million gallons in 2008.

Connolly said passage of the Federal Leadership in Energy Efficient Transportation Act of 2014 will “empower the Postal Service to optimize its delivery process by acquiring new vehicles with much lower operational costs and the added benefit of reduced emissions.”

“The time is long overdue for the Postal Service to replace its deteriorating and inefficient postal

vehicle fleet,” Connolly said. “Maintenance costs for this aging fleet continue to increase, and the average fuel consumption for these vehicles is abysmal, dramatically increasing delivery costs.”

Day said the primary focus for the Postal Service remains on postal reform as the best way to upgrade the fleet.

“Though USPS has grown revenue and reduced operating costs, factors including legal mandates and inflexible business and governance models have led to persistent losses,” Day said. “Through the passage of pending reform legislation, the Postal Service could then be in a financial situation where the organization is able to fund the investment to update the vehicle fleet.”