Postal Updates

USPS awards contract for new delivery vehicles to Oshkosh Corp.

Feb 25, 2021, 10 AM
The United States Postal Service has selected Oshkosh Corp. to build its long-awaited fleet of new-generation delivery vehicles. Photo courtesy of U.S. Postal Service.

Washington Postal Scene by Bill McAllister

Wisconsin-based Oshkosh Corp. has won the highly competitive competition to build the long-awaited new generation of United States Postal Service delivery vehicles.

The Postal Service announced Feb. 23 that it had awarded a 10-year contract to the Oshkosh Corp. to deliver up to 165,000 vehicles to replace its aging fleet of 140,000 Grumman long-life vehicles that are prone to catch fire.

The purchase decision was announced on the eve of Postmaster General Louis DeJoy’s appearance before Congress to answer questions about the agency’s financial future and the recent major delays in mail deliveries.

The overall value of the new vehicles has been reported to be about $5 billion, making it one of the largest single truck purchases in recent history.

In the Feb. 23 USPS news release, DeJoy said that the truck contract shows that “the U.S. Postal Service can have a bright and modern future if we make investments today that position us for excellence tomorrow.”

The contract calls for the Postal Service to make a $482 million initial payment to Oshkosh Defense, part of Oshkosh Corp., to complete design work on the vehicle.

It will have a right-hand drive and carry a larger amount of packages than the smaller long-life vehicles can accommodate. Packages are a growing part of the Postal Service’s products, and the new vehicles were designed for that task.

The news release said the “next generation” trucks will come with “either fuel-efficient combustion engines or battery electric powertrains.”

President Joe Biden has issued a directive calling for the federal government to move to electric vehicles.

Because the USPS is an independent federal agency, it is not clear how the president’s order can control its purchases.

The USPS said its new delivery vehicles “can be retrofitted to keep pace with advances in electric vehicle technologies.”

According to the announcement, the USPS plans to spread the purchases over a decade. This should make answering the question of how it will finance the vehicles easier on the financially troubled agency, which has been beset by large losses in recent years.

The new vehicles are not expected to be on the street until 2023, the USPS said.

“Our fleet modernization also reflects the Postal Service’s commitment to a more environmentally sustainable mix of vehicles,” DeJoy said. “Because we operate one of the largest civilian government fleets in the world, we are committed to pursuing near-term and long-term opportunities to reduce our impact on the environment.”

During a Feb. 24 hearing before the House of Representatives’ Committee on Oversight and Reform, DeJoy said that the truck purchase calls for 10 percent of the new fleet to be electric-powered. Asked why the number wasn’t larger, DeJoy said the agency did not have enough funds to plan for more electric vehicles.

The Postal Service has been secretive about its negotiations with several truck makers about the new vehicle.

It described the Oshkosh contract as “an indefinite delivery, indefinite quantity (IDIQ) contract, meaning that after an initial dollar commitment, the Postal Service will have the ongoing ability to order more NGDV [next generation delivery vehicles] over a fixed period of time, in this case, 10 years.”

The release also said that Oshkosh Defense is studying “which of their several U.S. manufacturing locations is best suited to potentially increase the production rate of the NGDV.”

The Postal Service did not name the other firms that remained in the contest, which initially was expected to produce a winning truck in 2019.

Trucks.com, a website that covers the trucking industry, has said the firms are Turkey-based Karan teamed with Morgan Olson of Sturgis, Mich.; Workhorse Group of Loveland, Ohio; and Oshkosh Corp. of Oshkosh, Wis., which teamed with Ford Motor Co. of Dearborn, Mich.

Oshkosh did not comment on published reports that it was working with Ford Motor Co., saying “we have teamed with industry leaders whose proven sub-systems and components speak to the quality of the Oshkosh Defense NGDV.”

“We will share more information about the supply base in the future,” said Tom Quigley, vice president and general manager of government programs at Oshkosh Defense.

 “We are in the final stages of selecting a location to support this contract,” Quigley said. “What I can tell you is the entire NGDV fleet will be proudly built in America.”

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