The U.S. Postal Service announced on Feb. 23 it has awarded a 10-year contract to Oshkosh, Wisc.-based Oshkosh Defense, a tactical vehicle manufacturer that builds defense trucks, to manufacture the next generation of postal delivery vehicles.

Under the contract’s initial $482 million investment, Oshkosh Defense will build 50,000 to 165,000 Next Generation Delivery Vehicles (NGDVs) — purpose-built, right-hand-drive vehicles for mail and package delivery — over a span of 10 years. The first NGDVs are estimated to appear on carrier routes in 2023.

The contract is only the first part of the effort to replace the Postal Service’s delivery vehicle fleet, which comprises more than 230,000 vehicles in every class.

The vehicles will be equipped with either fuel-efficient internal combustion engines (ICE) or battery electric powertrains. According to a statement by USPS, the NGDVs will be able to be “retrofitted to keep pace with advances in electric vehicle technologies.”

The NGDVs will upgrade the postal vehicles to modern standard technologies and will have increased cargo capacity to accommodate higher package volumes stemming from the growth of e-commerce, USPS said.

The initial investment includes plant tooling and build-out for the U.S. manufacturing facility where final vehicle assembly will occur. Oshkosh Defense is evaluating which of their U.S. manufacturing locations will produce the NGDV.

Replacing Outdated Fleet

The new vehicles will replace the estimated 140,000 Grumman Long Life Vehicles (LLVs) currently in service. A USPS audit in 2014 concluded that the current fleet, manufactured from 1987 through 1994, could only meet the agency’s delivery needs through the 2017 fiscal year.

The USPS initiated the process to replace the LLVs in 2015 when it awarded contracts to six suppliers — AM General, Karsan, Mahindra, Oshkosh, Utilimaster, and VT Hackney — to produce prototype vehicles for evaluation. Half of the original prototypes were to feature hybrid and new technologies, including alternative fuel capabilities.

VT Hackney partnered with Workhorse Group, though when that partnership dissolved in 2019, Workhorse emerged as a contender with an electric-only solution. Shares of Workhorse Group dropped by more than 50% on Tuesday. 

The other bidder in the running at the end was Karsan, a Turkish company that had partnered with Morgan Olson, which spun off from bankrupt Grumman Olson in 2001.

U.S. Sen. Tom Carper (D-Del.), chairman of the Senate Committee on Environment and Public Works and senior Democrat on the Senate Committee on Homeland Security and Governmental Affairs, who has championed the need to modernize USPS operations, issued a statement praising the move.

"By investing in a new, modern delivery fleet that reduces its carbon footprint and saves money over the long-term, USPS is taking significant steps towards bringing its operations into the 21st century. Upgraded postal trucks will also have increased cargo capacity, and include advanced safety features like 360-degree cameras and collision avoidance systems to help letter carriers do their jobs safely and efficiently."

Sustainability

“Our fleet modernization also reflects the Postal Service’s commitment to a more environmentally sustainable mix of vehicles,” said Louis DeJoy, Postmaster General and USPS CEO, in a statement. “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.”

The Zero Emission Transportation Association, a coalition of automotive-industry stakeholders advocating for 100% of vehicles sold by 2030 to be electric, took issue with DeJoy’s assessment.

“U.S. Postmaster General Louis DeJoy is trying to lock our postal vehicle fleet into decades of carbon-intensive transportation. This directly conflicts with the Administration’s stated goals and is certain to see swift pushback from appropriators who have sought to drive USPS vehicle electrification,” wrote Joe Britton, ZETA’s executive director.

“Many have questioned whether DeJoy has actually had USPS’ best interests in mind, but this reckless misstep is a new low. We encourage others to join us in speaking out about this decision and call on Congress to act on what is a clear invitation from DeJoy to reverse his decision.”