How Michigan can Save the Mail

The following appeared online in Detroit Free Press 5/5/10

Update: Article no longer available

Neither Rain, nor Snow, nor Dark of Night
How Michigan can Save the Mail

The U.S. postal service and the Detroit automakers have a lot in common. They’re both under intense pressure to transform their businesses to meet customer expectations driven by new technology. John E. Potter, Postmaster General of the United States, has already issued the dire pronouncement: drastic measures will be necessary to save the mail – in the form of either a significant rate increase or, even more severe, the elimination of Saturday delivery. As people adopt electronic communication for more activities, the cost of operating a postal infrastructure grows more and more difficult to bear.

Despite making great strides in quality and fuel economy over the last decade, the rising cost of fossil fuels, coupled with the recent global financial crisis, has devastated the domestic auto industry. Likewise, the postal service has been battered by rising delivery costs and fewer customers as people flock to e-mail for everyday communication.  For every penny fuel prices rise, the USPS pays an additional $8 million annually, and suddenly a $0.44 stamp doesn’t seem like such an extravagance after all.  Would you be willing to drive to New York, and then drop something off, for forty-four cents? But this remarkable capability requires the largest ground vehicle fleet in the world which is aging and costly to both the taxpayers and the environment.

Recently, the Detroit Free Press ran an article on Michigan’s bet on batteries citing five Michigan-based companies that will begin producing lithium-ion batteries in the next two years. Batteries are the future when it comes to cheap, safe power for vehicles, but it’s a zero-sum game.  People only buy so many cars and trucks every year, and batteries are heavy, expensive, and slow to produce. The best way to drive down the cost of batteries in the short term is to increase demand by putting them in every car on the road. Is customer demand high enough to reduce battery cost through sheer volume?

And yet, among the gloom of expensive batteries, gasping automakers and mountains of junk mail, there is the spark of opportunity for massive innovation.

The Postal Service owns the largest fleet of vehicles in the world, operating nearly 220,000 ground vehicles in the U.S. Of them, nearly 90% are those ubiquitous white vans all Americans associate with home mail delivery. Stopping. Going. Stopping again, they rarely accelerate beyond 30 miles per hour.  Thus it should come as no surprise that those delivery trucks manage – at best – a paltry 16 miles per gallon (MPG) during normal operation; the same rating as an eight-cylinder sports car or the latest SUV monstrosity. Further, it costs $3.79 for each and every delivery truck to haul itself a meager 25 miles.

Now for the really good news: the postal fleet is nearing the end of its operational life. The vast majority of these vehicles (over 140,000) were built by a GM/Grumman partnership and introduced in 1988 with a projected 30-year maximum lifespan. The USPS needs to find an innovative solution – soon.

For any of these five Michigan battery companies to become profitable or create the forecasted jobs, they need demand and consumer vehicles will not create nearly enough demand to drive down battery cost. If only there were an organization with an immense vehicular infrastructure it needs to replace or retrofit soon; one that spends three billion dollars every year on highway transportation expenses alone; one that currently consumes more than one hundred twenty million gallons of fuel annually…

The postal fleet represents an ideal test environment for the development and deployment of new battery technology.  The vehicles are government owned, maintenance facilities are already in place, and mail routes and distance are well documented.  Further, the nature of mail delivery with low city speeds and stop/go movement are exactly where battery powered vehicles excel. 

Demand drives quantity; quantity drives down costs. The volume of batteries required by the Postal Service would all but ensure that Michigan battery manufacturers add staff, creating thousands of new jobs in the state. And with the sudden mainstreaming of battery powered vehicles in the form of those ubiquitous delivery trucks, it won’t be long before newly affordable (and technically innovative) battery technologies become more realistic in consumer vehicles as well. USPS savings will be so great that Saturday mail delivery will remain safe, even as the Postal Service’s massive vehicle fleet emits less pollution. Innovation exists at the crossroads of talent, infrastructure, investment, and need. There can be no argument that the Postal Service needs to do something if it is to continue with its appointed rounds. Of course, if the auto industries would agree initially on a standard battery, that would drive volume too!  But that’s for a different day…This unique opportunity for collaboration between technical innovators and the ideal customer can usher in an era of affordable, green power for vehicles of all kinds.

Rick Jarman

President & CEO, National Center for Manufacturing Sciences

Rick Jarman is the President & CEO of the National Center for Manufacturing Sciences (NCMS) the largest cross-industry collaborative manufacturing research consortium in the United States located in Ann Arbor, MI.