Introduction

The United States Postal Service (USPS) is an independent agency of the executive branch¹ responsible for providing reliable, affordable, universal mail delivery across the United States. In FY2022, USPS handled more than 127 billion pieces of mail, including letter mail, packages, periodicals, marketing mail, and international mail.² USPS is primarily self-funded by revenue—roughly $78.5 billion in FY2022—from the sale of postal products and services, with Congress providing an annual appropriation—roughly $50 million in FY2023—as reimbursement for free mailing services provided to the blind and certain overseas voters.³ Congress has also provided supplemental funding for expenses such as pandemic-related operating expenses in 2020 ($10 billion) and fleet modernization in 2022 ($3 billion).⁴

A critical element of USPS's operations is its vehicle fleet, which had 236,532 vehicles in FY2022. The majority of the fleet consists of delivery and collections vehicles, including 140,664 specialized local delivery trucks called Long-Life Vehicles (LLVs; see Figure 1, left panel).⁵ LLVs were designed with right-hand drive for the specific purpose of mail delivery on city and rural routes. The design facilitates access to mailboxes without the need to exit the delivery truck, while also allowing the driver to exit and enter on the curb side. In 2015, USPS announced a multiyear acquisition strategy to replace its LLVs—the last of which was acquired in 1994⁶—with a newly designed vehicle called the Next Generation Delivery Vehicle (NGDV; see Figure 1, right panel). USPS design specifications listed a number of desired improvements based on observations operating LLVs, largely related to the following:⁷

• mitigating maintenance costs;
• addressing safety concerns due to vehicle fires and the general age of LLVs;
• accommodating shifts in mail mix (i.e., reduced letter mail volume and increased package volume); and
• incorporating additional features, such as heating and cooling.

Since the release of its initial specifications, USPS has identified the process of modernizing the LLV fleet as an opportunity to incorporate technology to reduce fleet greenhouse gas (GHG) emissions,⁸ which may also contribute to reducing fuel consumption, among other federal goals that apply to the USPS fleet. These aspects of fleet modernization are of particular interest to Congress.

Figure 1. Long-Life Vehicle (LLV) and Next Generation Delivery Vehicle (NGDV)

Source: U.S. Postal Service, Office of the Inspector General, Delivery Vehicle Acquisition Strategy, April 12, 2020, p. 15, https://www.uspsoig.gov/sites/default/files/reports/2023-01/19-002-R20.pdf.

In 2021, USPS selected a supplier, made several announcements, and took multiple actions, including the following:

• awarding a 10-year contract to Oshkosh Defense to design and assemble 50,000 to 165,000 NGDVs;⁹
• announcing that 10% of NGDVs would be battery-electric vehicles (BEVs)¹⁰;
• publishing a final Environmental Impact Statement (EIS) defending the selected share of BEVs;¹¹ and
• purchasing an additional 34,500 vehicles—commercial-off-the-shelf vehicles (COTS)—for more immediate replacement of LLVs and other delivery and collections vehicles, and increasing the overall share of BEVs to approximately 50% across NGDVs and COTS.¹²

In 2022, USPS placed its initial order for 50,000 NGDVs, which included approximately 20% BEVs.¹³ In September 2023, USPS published a Final Supplemental Environmental Impact Analysis, which described a modified plan to purchase 106,480 delivery vehicles—a mix of NGDVs and COTS with a minimum of 62% BEVs.¹⁴

In the 117^th Congress, lawmakers introduced several bills concerning the modernization of the USPS fleet.¹⁵ In general, the bills aimed to increase the zero-emission vehicle (ZEV; e.g., BEV or fuel cell electric vehicle) share of vehicle acquisitions, phase out non-ZEV medium- and heavy-duty vehicles, and mandate climate control units. Congress also held hearings to discuss fleet modernization—including questioning USPS about considering larger shares of ZEVs—and statements made in USPS's EIS regarding the proposed shares of ZEVs in the new fleet.¹⁶ Subsequently, Congress appropriated $3 billion to USPS in the law commonly referred to as the Inflation Reduction Act (IRA, P.L. 117-169), enacted in August 2022. Of these funds, Congress directed $1.29 billion to USPS for the purchase of ZEVs and $1.71 billion for the purchase, design, and installation of related infrastructure at USPS facilities.¹⁷

This report explores USPS efforts to modernize its delivery and collections fleet, including challenges and policy considerations, following an overview of the fleet's vehicles and fuel consumption, and a discussion of federal requirements and standards applicable to USPS.

Overview of the USPS Fleet

USPS employs the largest federal vehicle fleet (39% of the overall domestic federal fleet) and one of the largest fleets in the world,¹⁸ with 236,532 vehicles carrying out its mission and duties in FY2022.¹⁹ As seen in Figure 2, delivery and collection vehicles made up the largest share (91%, 216,456 vehicles). The most recent data available of those delivery and collection vehicles, the largest share comprised LLVs (69% at the end of FY2019).²⁰ LLVs were designed with right-hand drive, specifically for mail delivery and collection on city and rural routes. Built with an expected service life of 24 years, ages for existing LLVs ranged from 25 to 32 years old in FY2019. USPS attributes increasing maintenance costs—$5,007 per vehicle in FY2019—to these aging vehicles.²¹ The rest of the overall fleet consisted of various other vehicles used for other purposes, such as mail transportation (e.g., for transporting mail between processing facilities) and various administrative services.

Figure 2. United States Postal Service (USPS) Vehicle Fleet 236,532 total vehicles in FY2022

Source: United States Postal Service (USPS), FY2022 Annual Report to Congress, p. 29, https://about.usps.com/what/financials/annual-reports/fy2022.pdf. Notes: Data according to USPS, in actual units indicated, unaudited. Some variations exist between USPS data and General Services Administration fleet data, which reports 241,054 vehicles in FY2022.

As seen in Figure 3, when broken down by fuel type, gasoline- and diesel-powered vehicles made up 87% of the overall fleet in FY2022.²² The majority of the remainder of the fleet consisted primarily of E85 vehicles (dual-fuel vehicles that are capable of running on a gasoline or a blend of gasoline with up to 85% ethanol by volume). Non-plug-in hybrid-electric vehicles, BEVs, low greenhouse gas emitting (LGHG) vehicles, compressed natural gas (CNG) vehicles, and liquefied petroleum gas (LPG) vehicles made up less than 1% of the overall fleet.²³

Figure 3. United States Postal Service (USPS) Vehicles by Fuel Type 241,054 total vehicles in FY2022

Source: General Services Administration (GSA), FY2022 Federal Fleet Open Data Set, Table 5-3, "Vehicle Inventory by Fuel Type." Notes: LGHG = low greenhouse gas emitting vehicles. LGHGs in the USPS fleet are gasoline-powered, though LGHGs may also be diesel-powered. GSA reports on several other vehicle types that are not in the USPS fleet: diesel hybrid-electric vehicles, gasoline and diesel plug-in hybrid-electric vehicles, hydrogen fuel cell vehicles, low-speed electric vehicles, and liquefied natural gas vehicles.

Fuel Consumption and Greenhouse Gas Emissions

The USPS fleet accounted for the largest share (58%) of overall federal fleet fuel consumption in FY2022, followed by the Departments of Defense (15%) and Justice (6%).²⁴ For USPS, more than 99% of the 221 million gallons of gasoline equivalent (GGE) consumed was gasoline (189 million GGE) or diesel (31 million GGE).²⁵ Alternative fuels made up less than 1% of fuel consumption (summarized in Table 1). These fuels included E85, biodiesel (B20, a blend of diesel with 20% biodiesel by volume), LPG, CNG, and electricity.

Emissions for the USPS fleet made up the largest share (70%) of overall GHGs for federal fleets in FY2022, followed by the Departments of Defense (13%) and Agriculture (5%).²⁶ GHGs for the USPS fleet have been on the rise since 2008, increasing by 46.4% from 1.34 million metric tons of carbon dioxide equivalent (CO₂e) to 1.96 million metric tons of CO₂e in 2022 (see Figure 4).

Figure 4. USPS Fleet Greenhouse Gas Emissions Emissions in MMT CO2e and share of federal fleet emissions

Source: Department of Energy (DOE), Office of Energy Efficiency and Renewable Energy (EERE), "E-4 Scope 1 & 2 GHG [Greenhouse Gas] Emissions from Standard Operations (Targeted Emissions) by Sector and Category, FY 2008 through FY 2022 (Metric Tons of Carbon Dioxide Equivalent)," https://ctsedwweb.ee.doe.gov/Annual/Report/Scope1And2GHGEmissionsByOperationsTypeTargetNonTargetSectorAndCategory.aspx. Notes: GHGs reported by EERE in million metric tons of carbon dioxide equivalent (MMT CO2e). United States Postal Service (USPS) fleet emissions are displayed as a share of overall federal fleet emissions.

Fuel efficiency for new vehicles presents an opportunity to potentially reduce fuel consumption and GHGs for the fleet. LLV fuel efficiency is rated at 17 miles per gallon (mpg), though it has been observed to be 8.6 mpg.²⁷ While official mileage ratings are useful for comparing vehicles, actual mileage will depend on real-world driving conditions.²⁸ As of 2021, USPS reported a baseline of 14.7 mpg for NGDVs powered by gasoline, which decreased to 8.6 mpg when operating onboard air conditioning—LLVs do not have air conditioning, though it is expected to be a standard feature for NGDVs.²⁹ Incorporating more battery-electric NGDVs may help the USPS fleet reduce fuel consumption and GHGs emissions, and potentially help it meet requirements and goals for federal fleets.

Fleet Management Requirements and Goals

The USPS fleet and related activities are subject to a number of federal requirements and goals that govern the management and operation of government vehicle fleets, including fuel efficiency, GHGs, fuel consumption, and fleet acquisitions. Table 2 provides information on select federal fleet management requirements that are applicable to the USPS fleet under the Energy Policy Act of 1992 (EPAct92; P.L. 102-486; 42 U.S.C. §13212(b)(3)) and the Energy Independence and Security Act of 2007 (EISA; P.L. 110-140; 42 U.S.C. §13212(f)).³⁰

The Office of Budget and Management (OMB) publishes scorecards and performance on energy efficiency and sustainability goals annually.³¹ In FY2021, USPS missed the benchmarks for two fueling metrics:

• alternative fuel consumption was 51% less than the FY2005 baseline (federal fleets are required to increase alternative fuels by 10% relative to the baseline);³² and
• petroleum fuel consumption was 38% more than the FY2005 baseline (federal fleets are required to reduce petroleum fuel by 20%), though it was 2.2% less than FY2020.

Federal fleets, including the USPS fleet, must meet certain vehicle fleet acquisition goals. These include requiring LGHG vehicles for all new light- and medium-duty vehicle acquisitions, and requiring 75% alternative fuel vehicles for new light-duty vehicle acquisitions, though these requirements do not apply to LLVs and NGDVs, which are classified as heavy-duty vehicles.³³ For FY2021, OMB reported 0.9% AFVs for new USPS fleet acquisitions.

The incorporation of increasing numbers of BEVs into the USPS fleet has the potential for dual impact on the fleet's progress toward federal requirements and goals. Greater use of BEVs could contribute to a reduction in petroleum consumption. Also, a transition could contribute to an increase in overall electricity consumption, potentially necessitating greater electricity generation from renewable energy sources. In FY2021, USPS derived 4.5% of its annual electricity from renewable energy sources—the federal requirement is 7.5%, though USPS is excepted from meeting this requirement.³⁴ Despite the potential financial and logistical challenges, depending on the electric generation mix, a shift toward BEVs may contribute to progress in increasing renewable energy sources, increasing alternative fuel consumption, decreasing overall fuel consumption, and USPS's own goals for carbon pollution-free electricity and reduced GHGs emissions from the fleet and USPS as a whole.³⁵

USPS Fleet Modernization and Vehicle Replacement

Since 2015, USPS has engaged in activities to modernize its delivery and collection fleet, specifically to replace its unique right-hand drive LLVs. The multiyear acquisition strategy includes the design and production of a new class of right-hand drive delivery vehicles—NGDVs—to replace LLVs. Following some delays in awarding the contract, in February 2021, USPS awarded a 10-year contract to Oshkosh Defense to design and assemble 50,000 to 165,000 NGDVs, with the first deployment of NGDVs potentially as soon as 2023.³⁶ Design requirements for NGDVs included improved fuel efficiency, space adjustments for the growing volume of packages, and additional technological features.³⁷ In 2022, USPS announced plans to purchase 34,500 COTS vehicles, to include as many BEVs as available and compatible, though any of the special right-hand drive vehicles are likely to be internal combustion engine vehicles (ICEVs).³⁸ This contract is of interest to Congress and received scrutiny from some Members for the large share of ICEVs among NGDVs, which was discussed in congressional hearings.³⁹

Environmental Analysis

In December 2021, USPS completed an EIS for its vehicle acquisition plan, in accordance with the National Environmental Policy Act, as a major federal action that has been determined to have a significant effect on the quality of the human environment.⁴⁰ The analysis compared the expected environmental impacts of four acquisition scenarios (aside from taking no action):

• 1. the USPS-proposed drivetrain mix of 10% battery-electric NGDVs and 90% internal combustion engine NGDVs;
• 2. 100% battery-electric NGDVs;
• 3. 100% internal combustion engine COTS vehicles (no NGDVs); and
• 4. 100% battery-electric COTS vehicles (no NGDVs).

Comparing the two NGDV scenarios, the analysis concluded that the 10% BEVs with 90% ICEVs scenario was preferred by USPS, in large part due to the cost. The total cost over 20 years for 75,000 NGDVs was estimated to be $2.3 billion more for 100% BEVs compared to the preferred 10% BEVs scenario.⁴¹ However, the analysis also estimated for 165,000 NGDVs that the 100% BEVs scenario would reduce fuel consumption (not counting energy used for electricity generation) by 135 million gallons annually compared to 25 million gallons in the 10% BEVs scenario.⁴² These reductions in fuel consumption would be associated with an estimated reduction in GHGs of 865,000 metric tons of CO₂e for the 100% BEV scenario compared to 290,000 metric tons of CO₂e for the 10% BEV scenario.⁴³

The EIS received a number of responses from EPA, several states' attorneys general, and environmental groups.⁴⁴ These were followed by various USPS announcements regarding changes to the number and types of vehicles to be acquired. At the end of 2022, USPS had committed to acquiring at least 60,000 NGDVs, and increasing the share of battery-electric NGDVs from 10% to 50%.⁴⁵ Additionally, USPS announced $2.3 billion for an interim plan to acquire 68,000 COTS—including 30,000 right-hand drive vehicles—to add or replace delivery and collection vehicles while waiting on production of NGDVs.⁴⁶ The intended BEV share for the overall vehicle acquisition was 40%.⁴⁷

In September 2023, USPS published a Final Supplemental Environmental Impact Statement that further modified the acquisition plan, analyzing two alternatives alongside the preferred scenario of 10% battery-electric NGDV from the final EIS:⁴⁸

• 1. A mix of NGDVs and COTS totaling 106,480 delivery vehicles over six years with an intended BEV share of 62%, and
• 2. 100% NGDVs totaling 106,480 delivery vehicles over eight years with an intended BEV share of 62%.

According to the Final Supplemental Environmental Impact Statement, the proposed increases to the share of BEVs are in part a response to funding made available by the IRA for USPS to purchase ZEVs and related infrastructure.⁴⁹

Challenges and Opportunities for Fleet Modernization

The modernization of the USPS fleet presents a range of challenges and opportunities. As a primarily self-funded independent agency of the executive branch, USPS faces significant financial pressures. The plan to replace LLVs has necessitated the design and production of a new vehicle. This process has experienced a number of delays for replacing the vehicles that are among the oldest in the USPS fleet. USPS faces additional challenges with vehicle electrification, and with achieving a 100% ZEV fleet more broadly. The acquisition of BEVs also faces consideration alongside the costs of acquiring and installing related charging infrastructure.

As the fleet incorporates BEVs, USPS may face increased electricity costs or peak demand fees, which may be mitigated through developing charging plans based on daily routes and charging needs.⁵⁰ Some types of electricity generation projects and energy storage projects that might support other sustainability goals, such as onsite electricity generation with battery energy storage systems or partnerships with utilities and local governments, may also help to reduce energy costs associated with the operation and administration of BEVs.

The manner in which USPS addresses these challenges presents an opportunity for USPS to become a leader in operating and managing large electric vehicle fleets. One of USPS's strategic areas of focus from its 10-year Delivery for America Plan (issued in March 2021) is to "modernize [the] delivery vehicle fleet, and with Congressional support, implement [an] electric fleet by 2035."⁵¹

Policy changes could also play a role in facilitating fleet modernization for USPS. For example, the federal government could offer additional financial support or offer technical assistance for USPS to recover certain costs through installation and operation of publicly accessible charging stations. Additionally, USPS could work with federal and state regulators to develop flexible emissions standards that account for the unique challenges and characteristics of the USPS fleet.

Additionally, policymakers and stakeholders may explore the extent to which USPS fleet modernization could benefit from a comprehensive and collaborative approach. Working with stakeholders across the federal government, state and local governments, and the private sector could help USPS identify and pursue innovative solutions to incorporate BEVs and other ZEVs, achieve requirements and goals, and improve USPS's provision of the essential service of mail and package delivery across the country.