June 2, 2008 - The U.S. Postal Service (USPS) is rethinking its use of ethanol-fueled vehicles after an internal report found that the trucks decreased fuel efficiency 29%.

A lack of infrastructure proved the biggest roadblock for USPS's nationwide fleet of 3,600 E85 ethanol flex-fuel trucks, which run on a cleaner-burning blend of ethanol and gasoline. Most of the 1,100 retail sites that sell E85 are clustered in the Midwest, the report notes. In addition, manufacturers of flex-fuel vehicles are only making 6- and 8-cylinder trucks - far larger than USPS requirements. Fueling the bigger trucks actually increased gasoline consumption by 1.5 million gallons.

"The price must be at least 30% less than gasoline to be a cost-effective," the report concludes.

The report recommends focusing deployment of E85 vehicles in regions where the fuel is most readily available and holding off on increasing ethanol use until the price of E85 goes down - or the price of gas goes up.

In addition to its flex-fuel program, USPS is exploring other ways to boost fuel efficiency, such as using GPS systems to optimize delivery routes. The postal carrier has set a goal to reduce total miles driven by 5%.

Download a copy of the report here (PDF).