Posted on 05/11/2019 3:51:47 AM PDT by Kaslin
Just when everyone thought that the United States Postal Service’s (USPS) finances couldn’t get any worse….they did. On May 10, the USPS announced second quarter FY 2019 losses of $2.1 billion, bringing total postal net losses to more than $70 billion since 2007. But be prepared to suspend disbelief even further, it may soon get far worse.
On May 8, President Trump announced General Motors’ intention to sell its Lordstown Assembly plant to the Cincinnati-area Workhorse Group (a company that reported revenues of just $763,173 in 2018 and a net loss of $36.5 million) to build electric trucks. The deal is contingent on a multi-billion dollar potential agreement with the USPS to buy a “green” new fleet. While this may sound like good news to Ohioan plant workers, the USPS (and, yes, taxpayers) would stand to lose billions of dollars from a needlessly-expensive new fleet. There are better ways to bring automotive jobs to the heartland than gouging taxpayers and further worsening USPS finances.
When President Trump “reported” that “GM will be selling their beautiful Lordstown Plant to Workhorse, where they plan to build Electric Trucks,” he failed to mention the high-stakes, nearly-$7 billion dollar USPS fleet procurement process that has slogged along for years. The beleaguered agency has had the same trucks for over a generation, and they’re aging with flair. Since the start of 2019, there’s already been 12 vehicle fires, and regular breakdowns have contributed to late mail and frayed trust between the USPS and its customers.
Any sober-minded company would use the opportunity to purchase a new, economical fleet that gets employees and products from point A to point B with minimal disruption to delivery chains. Unfortunately, the USPS has a stated preference for hybrid or alternative fuel capabilities and has requested that half of all prototypes be “green” vehicles. A January report by the Taxpayers Protection Alliance estimates that this preference “would cost the agency an addition $172.41 million per year over its slated $821 million annual expenditure over the next decade to acquire new vehicles.”
Backers of electric vehicles claim that battery costs will continue to decline, making green fleets cheaper than conventional fleets over their lifespan. But the currently-high cost of electric vehicles are unlikely to go much lower and pressures on metal supplies may in fact force prices to increase above the status-quo. Prices for lithium, a key metal in electric batteries, have increased roughly four-fold since the start of the decade.
Battery prices have managed to decline for most of that period due to technological improvements, but high prices are beginning to catch up to overall battery costs. Bloomberg data shows that the decrease in battery prices is rapidly slowing down, and it’ll take roughly a decade for “almost all segments” of the electric vehicle industry to reach parity with conventional fleets even assuming that the large regulatory disparity between federal treatment of conventional and electric fleets continues. This is unlikely, as cost-lowering deregulation continues unabated.
Most other estimates have electric battery pack costs being at least 20 percent higher than Bloomberg estimates 5 to 10 years out. But, few analyses account for a growing costly problem: battery disposal. Battery recycling rates are woefully low, and The Guardian reports that, “Not only do the batteries carry a risk of giving off toxic gases if damaged, but core ingredients such as lithium and cobalt are finite and extraction can lead to water pollution and depletion among other environmental consequences.” If the USPS becomes a “trendsetter” in electric battery waste, who will foot the bill? The U.S. government could insist that the agency foot the bill, but such costs would inevitably increase financial problems and hasten a massive taxpayer bailout.
The USPS fleet acquisition process, which is expected to be finalized this year, can spur manufacturing and the jobs that come with it. But, it would be costly and unnecessary to insist on a “green” fleet that would break the bank and carry hefty environmental costs. For such a large capital investment, taxpayers and consumers should be assured of sensible, cost-conscious purchases that don’t burn through money without helping the environment.
GM claimed they were closing Lordstown because there las no longer a demand for the fuel efficient Chevy Cruz.
Postal service should be privatised. Fedex, UPS etc I feel sure could do the job far more efficiently.
I saw a Cruze 4 door hatchback for the first time yesterday. Thought it quite good looking, was surprised it was a Chevy.
Lithium prices are going down:
https://www.investopedia.com/investing/why-lithium-stocks-are-plunging-amid-electric-car-boom/
I don’t believe there is no demand.
I like the idea of USPS going online with a personalized service that would replace Facebook, Twitter, et al. I detest FB telling me every day what I should read. Censorship would be overcome, services could be procured by business, and privacy would be insured. All in all, a win/win.
Well gee when executives say it in moments of truth I guess they are lying. /s
How many elecrics do you own?
Do you want to pay for the post office to spend billions more on garbage?
Did you read the entire article, this company’s income (or lack thereof), the recent fires, etc?
“I don’t believe...BECAUSE...”
That’s how an adult sentence on FR should read.
“Postal service should be privatised. Fedex, UPS etc I feel sure could do the job far more efficiently.”
As petty as this sounds, I think one reason the Post Office will not be privatized is Congress gets to use it for free. Another reason is votes. The postal workers have generous benefits and there is over a million of them. How would they vote if Congress did away with those benefits that aren’t matched by any private company? Also, the Postal Service is part of the Constitution. I think changing it would cause a constitutional challenge and, likely, any deal would be undone by the courts.
My solution is to make the Postmaster General a ceremonial office and to gradually let the service die as the current employees die. It can be kept alive in some ceremonial capacity thereafter if that resolves the constitutional issues. (I am old enough to remember when they delivered on Christmas day. As a small child I thought, what about the Christmas of the guy driving the truck? I suspect that service will continue to contract until it’s just one to three times a week. No company sends important documents by USPS anymore. Most private communications goes by text or email.)
When Facebook ask me what is on my mind, I always say that is none of their business.
Good points all.
Letting the service dir thru attrition sounds like best bet.
I live in a community in which mail is delivered daily but to a central location. Personally I get my mail twice weekly and have no problem doing that.
Christmas Day delivery? Really? I’m 76 yrs old and don’t remember that. Was it a local thing?
Our mailman drives a 4wd Jeep. He needs power on his route. I don’t think an electric vehicle could get around this area with all the steep roads and off road conditions. Now that I’ve thought of it I’ve never heard of an electric 4x4.
“Christmas Day delivery? Really? I’m 76 yrs old and don’t remember that. Was it a local thing?”
Late ‘50’s or early 60’s. They advertised seven day a week service then. I wouldn’t think it was local. I had an aunt who could never get her stuff together to mail things on time. Perhaps your relatives were better organized so you didn’t notice?
Time to privatize the postal system and allow competition in home mail delivery. The USPS is incapable of competing like this and has to go.
I looked into it a couple of years ago and there was one electric off road vehicle. Very impressive specs, but it was 10’s of thousands and basically gave you an enclosed ATV.
Snail mail (envelopes not packages) is going the way of the landline. In fact, it is well along that path. Ask people under thirty (the ones not living in their moms’ basements) how often they check their snail mail. In they can receive packages without seeing their regular mail, that is what most do. We really need to get with the times and start on a path towards ditching federal mail delivery.
My smaller parcels from Amazon are delivered, along with regular mail, by USPS. (And sometimes to my door, a 300-foot walk).
I’ve had a USPS vehicle driver down my drive and put an Amazon package on my porch on a Sunday. USPS probably had to agree to guarantee 2 day delivery for Prime Members.
No although even today the USPS delivers prority mail on holidays including Christmas.
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