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The Postal Service’s electric mail trucks are way behind schedule

RicoSuave102954

HB Heisman
Jul 17, 2023
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Montezuma, Iowa
A multibillion-dollar program to buy electric vehicles for the U.S. Postal Service is far behind its original schedule, plagued by manufacturing mishaps and supplier infighting that threaten a cornerstone of outgoing President Joe Biden’s fight against climate change.

The Postal Service is slated to purchase 60,000 “Next Generation Delivery Vehicles,” or NGDVs — mostly electric — from defense contractor Oshkosh, which has a long history of producing military and heavy industrial vehicles, but not postal trucks. Congress provided $3 billion for the nearly $10 billion project in the 2022 Inflation Reduction Act, one of Biden’s chief legislative accomplishments.

But as of November, the Postal Service had received only 93 of the Oshkosh trucks, the agency told The Washington Post — far fewer than the 3,000 originally expected by now. Significant manufacturing difficulties that were not disclosed to the Postal Service for more than a year have stymied production, according to internal company records and four people with knowledge of the events, speaking on the condition of anonymity to avoid professional reprisals.

Among the problems: Engineers struggle to calibrate the vehicles’ air bags, according to two people familiar with the manufacturing process. When workers ran leak tests on the vehicles’ bodies and internal components, water poured out as if their oversize windows had been left open in a storm, three people said.

Currently, Oshkosh can produce just one truck per day at its South Carolina factory, according to internal company records and five people with knowledge of the production process. Company records, including emails among executives and internal progress reports, show Oshkosh originally planned to be manufacturing more than 80 vehicles per day by now.

The wide-ranging production problems have not been previously reported and were not mentioned in an inspector general audit published in October. A senior company executive tried to alert the mail agency to the problems in 2022, but was blocked by superiors, four of the people said.

“This is the bottom line: We don’t know how to make a damn truck,” said one person involved in production.

The massive delay means a project once hailed as a hallmark of Biden’s industrial and climate agenda may not take shape until long after he leaves office on Jan. 20 — or could never materialize. Republicans in Congress have pledged to repeal key funding sources for Biden’s climate investments with the GOP in power next year on Capitol Hill and at the White House, and Trump-aligned officials with designs on cutting government spending have circled the Postal Service as an area of interest.

“The days of a bailouts and handouts are over. The American people spoke loud and clear. I worry about that EV money sitting around, that it may be clawed back. I think there are lots of areas where there’s going to be significant reform over the next four years,” House Oversight and Reform Committee Chairman James Comer (R-Kentucky) told Postmaster General Louis DeJoy in a hearing this week.

This report is based on nearly 21,000 pages of government and internal Oshkosh records obtained by The Post through the Freedom of Information Act and other sources. It is also based on interviews with 20 people familiar with every phase of the truck project, many of whom spoke on the condition of anonymity to freely discuss proprietary information.

In June, the Biden administration honored the mail service’s EV commitment with a “federal sustainability award.”

In a statement, an Oshkosh spokesperson said the company was “fully committed to being a strong and reliable partner” for the Postal Service and “we remain on track to meet all delivery deadlines.”

“Since we were selected to fulfill the NGDV contract in 2021, Oshkosh and the USPS have worked closely together to design and deliver a modernized fleet with a flexible mix of American-made electric- and gas-powered vehicles that will connect every home and business across the country. New vehicles are in service today, which have received overwhelmingly positive feedback from postal carriers,” the spokesperson said.

The company did not respond to a list of detailed questions.

John Pfeifer, Oshkosh’s chief executive, told investors on Oct. 30 that the company was “really happy with where we are” and called the NGDV a “revolutionary vehicle.”


“We’re today ramping up production,” Pfeifer said. “When you go through — you take a brand-new vehicle to market, we believe, together with the Postal Service, that a prudent production schedule is better than trying to start by sprinting. So we’re ramping up today. We’ll be at full production throughout 2025.”

A Postal Service spokesperson said several issues with the NGDV program were detailed in the inspector general audit and “resolved directly with our supplier.” But the agency declined to comment on specific questions or identify which issues the report helped resolve. The spokesperson called the truck procurement “a large, successful program that for a variety of reasons had many moving parts.”

It said that any major production of a purpose-built vehicle has unique engineering requirements, and its contract with Oshkosh allows for robust performance monitoring. The Postal Service said it expects to receive 6,484 NDGVs in the current fiscal year.


“Our relationship with Oshkosh is defined by our contract, and we intend to hold Oshkosh to its contractual obligations, while recognizing the normal interplay that will need to take place in the execution and performance of an agreement of this magnitude,” the spokesperson said.

“We’re moving forward in modernizing our vehicle fleet — which will bring tremendous benefits to our organization. Under our plan, letter carriers in every state will be able to deliver mail and packages using new and modern vehicles within the next five years,” DeJoy said in a statement. “The work being done on this program demonstrates electrification and sustainability efforts can coexist — not conflict — with cost savings, efficiency gains and operational transformation priorities.”

The agency is also purchasing tens of thousands of other vehicles, including EVs, from mainstream automakers.

Biden administration officials declined to comment.
 

Early delays​

For nearly a decade, the Postal Service tried but couldn’t afford to purchase a new delivery fleet, even though its “Long Life Vehicles,” or LLVs, are in desperate need of replacement. Produced by Northrop Grumman and its corporate predecessors between 1987 and 1994, the 130,000 vehicles use parts that have been discontinued, forcing postal machinists to reverse-engineer them for repairs.

The LLVs also lack standard safety features such as air bags and air conditioning — and occasionally burst into flames after decades of overuse. They manage a gas-guzzling 8.2 miles per gallon.

The Postal Service pushed Congress aggressively to overhaul its balance sheet and give it the financial flexibility to modernize and purchase new trucks. With a major contract in mind, U.S. auto giant Ford emerged as a potential supplier, according to three people with knowledge of company strategy. Ford would supply its Transit and eTransit cargo vans and Oshkosh would modify them to postal specifications.


But by 2020, Postal Service delays and additional testing requirements led Ford to drop out.

“I personally thought it was going to happen,” said Curt Magleby, Ford’s vice president of government relations from 2011 to 2020. “It just got bogged down until we were looking at product plans, and it just couldn’t fit in the plan.”

A Ford spokesperson referred questions to Oshkosh, which declined to comment.

In February 2021, the Postal Service purchased a vehicle that Oshkosh designed on its own and had never tested for durability, according to two people familiar with the details. Oshkosh did not produce a drivable prototype until months after the contract was awarded, the people said.

Oshkosh turned to Michigan-based Challenge Manufacturing to replace Ford as the body supplier, but Oshkosh and the Postal Service had fallen behind schedule with the final NGDV design, according to records and interviews. Challenge soon encountered related delays, unable to start production without it, records show. Challenge declined to comment on specific questions about its production capabilities and schedule.


In April 2022, Biden signed a measure into law that relieved the Postal Service of $107 billion of past-due and future liabilities. Finally in a healthier financial position, the Postal Service shifted its vehicle procurement into high gear. The truck Oshkosh produced — with its extended hood, massive bumpers and forehead-like windshield — was dubbed “the platypus” by postal and company officials.

In June 2022, DeJoy told Congress that Oshkosh had won the contract in large part due to its manufacturing record, receiving the highest score of at least three procurement finalists for “supplier capability” and “overall technical score.”

“We have devoted considerable time and money to procure purpose-built EVs that Americans will see in their neighborhoods beginning in 2023,” the postmaster wrote to Sen. Gary Peters (D-Michigan), who chairs the committee in charge of postal oversight.


Weeks after DeJoy’s confident report that NGDVs would be on the road in 2023, a Challenge executive informed Oshkosh leaders that it didn’t expect to complete its first NGDV body until May 2024, according to emails obtained by The Post.

In a statement, Challenge said it is working with Oshkosh during the “design evolution of the vehicle” and will “incorporate these developments into the components that we supply.”

‘The only ethical path’​

By August 2022, Congress passed Biden’s Inflation Reduction Act, the largest investment to fight climate change in U.S. history, chock full of incentives for electric vehicles and green manufacturing. The money it dedicated to the Postal Service is being used to cover the cost difference between gas-powered vehicles and more expensive EVs, according to a White House official, who spoke on the condition of anonymity because they were not authorized to comment publicly. The funding also helps the Postal Service pay to install vehicle chargers.


Quickly, Biden administration officials pressed DeJoy to purchase more EVs to help the administration’s broader climate and green-industry goals, records and interviews show.

On Dec. 20, 2022, the Postal Service announced plans to phase out the old gas trucks and exclusively purchase EVs by 2026. It would buy more than 106,000 vehicles, including roughly 45,000 electric NGDVs and 21,000 EVs from mainstream automakers such as Ford, Ram and Mercedes.

“It will get people thinking, ‘If the postal worker delivering our Christmas presents … is driving an EV, I can drive one, too,’” John Podesta, Biden’s senior adviser for clean energy innovation, said at an event announcing the plans at postal headquarters in Washington.

Two days later, a senior Oshkosh executive sent a stark warning to his superiors: Oshkosh was months, if not years, behind in software development and testing, Don Bent, the then-chief operating officer in charge of the NGDV’s South Carolina factory, told Tim Bleck, then the company vice president overseeing the project. Challenge was also far behind.


Despite the fanfare in Washington, Oshkosh could not meet the Postal Service’s requirements or timeline, Bent wrote.

“I firmly believe that the only ethical path for Oshkosh is to correct these inaccurate statements with the USPS. These known false statements should never have been made or implied and I am not comfortable being part of these meetings where we are sharing false information,” Bent wrote to Bleck, according to company records obtained by The Post.

Less than an hour later, Bent asked Bleck for a meeting with postal officials within the next several weeks to “expose the inaccurate timelines and information shared with USPS earlier this month.” Bent declined to comment.

Oshkosh did not respond to questions about the emails, Bent’s attempts to communicate with the Postal Service or when and how information was shared with the agency about production problems. In its statement, the company said, “Design iterations following an initial proposal are a common and expected part of the testing and development cycle for any complex program and we are meeting the terms of our agreement with the USPS.”


On May 1, 2023, the Postal Service disclosed the delays, acknowledging the slowdowns in a legal filing that blamed court challenges of its environmental record.
 

Work begins and prices rise​

As Oshkosh fell behind, it raised prices. In March 2023, the company and Postal Service agreed to an Inflation Reduction Act “premium adjustment,” according to contracts obtained by The Post. As the Postal Service ordered more EVs, the cost rose to $2.6 billion for 35,000 vehicles.

For 1,958 gas-powered NGDVs, the agency agreed to pay $54,584 per truck.

For 28,195 EVs, it would pay $77,692 per truck.

It also purchased several thousand more vehicles equipped with spare tires and training seats that each cost a few hundred dollars more than the base model. The modifications increased the overall value of the Oshkosh purchase by more than half a billion dollars, according to company financial disclosures.


Neither Oshkosh nor the Postal Service responded to questions about the value of their contract; the Postal Service has resisted supplying that information to Congress, citing propriety business information, according to emails between the agency and congressional aides.

As Challenge prepared for production, Oshkosh retained an interim supplier. But that company could only provide five truck bodies per week, according to interviews and records. By August 2023, Oshkosh projected it would deliver a mere 150 vehicles to the Postal Service in 2024 — “approximately 2,100 less than plan,” according to a company presentation — and 90 more than Oshkosh actually provided, the Postal Service reported.

Bent was still issuing warnings about the vehicle’s production problems, according to emails and company records obtained by The Post, and was candid in team meetings with factory staff, according to four people involved, insisting that employees fix problems to ensure the trucks’ safety and durability.


Then in November 2023, he called a meeting to announce his resignation. He told colleagues he would leave Oshkosh at the end of the year. He declined to comment, and Oshkosh did not respond to questions about his departure.

This February, in its annual earnings report, Oshkosh warned investors that “our performance under the USPS contract may not be what we expect” and described new risks that echoed the concerns Bent’s emails had raised. Among them: that the Postal Service would order fewer vehicles than expected, that “engineering time to finalize the production vehicle design may be greater than we anticipate,” and that “tooling and factory build-out activities” may take longer than planned.

In May, Oshkosh finally delivered the first vehicles to the Postal Service for evaluation. The trucks required significant fixes before they could be declared fit for use. Oshkosh employees found parts installed incorrectly, shoddy construction and faulty software, according to three people familiar with the situation.


For example, the air bag system could not tell whether the truck had been jostled by a pothole or smashed in a collision. Oshkosh engineers were able to install a software fix, but the nonstandard correction may not be immediately available to Postal Service mechanics who work on the vehicles, two of the people said.

Oshkosh did not respond to questions about the NGDV’s safety or its production quality. In its statement, the company said, “We continue to be pleased by the positive feedback on the program and the vehicle design that we have received from the USPS and its postal carriers.”

An NGDV test driver told The Post they were pleased with the vehicle during road test. Despite its awkward shape, it was well-balanced and its safety components performed well.

“This fleet that they purchased has to be able to last. And from what I see so far, it looks pretty good,” the driver said, speaking on the condition of anonymity because they weren’t authorized to discuss the truck publicly. “Yes, there’s some manufacturing glitches and we’re in the pretty early stages of production, where the production techniques need to be perfected. But overall, the few issues we’ve seen have been pretty minimal when you’re talking about creating a vehicle from the ground up.”


Making deliveries​

As early as 2022, postal leaders and some of DeJoy’s advisers pushed him to move the agency away from Oshkosh, citing potential legal problems with the contract and the hefty environmental footprint of the gas-powered trucks. They get 8.6 mpg with the air conditioning running, only 0.4 mpg better than the old trucks.

Some postal leaders have privately renewed those calls because of Oshkosh’s delays, according to two people familiar with the conversations. And the agency has appeared willing to consider alternatives. In 2022, it tested EVs made by a General Motors subsidiary, and in January, it agreed to try out electric delivery vehicles from start-up Canoo.

And last January, the Postal Service held another splashy EV event, hosting Biden administration officials in Atlanta to celebrate its first vehicle charging stations.

The EVs parked in the background were Ford eTransits purchased in 2023. More than a thousand of them are already making deliveries.

 
Unimpressed Sea GIF by SpongeBob SquarePants
 
93/3000.


Also, "we are creating a vehicle from the ground up" made me chuckle.


You're building a glorified EV box van. It isn't rocket science.
 
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