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Oshkosh Defense Wins Giant Mail Truck Replacement Contract

After years of delays and deliberations, the U.S. Postal Service awarded a 10-year contract to Oshkosh Defense to produce the next mail truck.

The Postal Service said the program would launch “the most dramatic modernization of the USPS fleet in three decades.”

Under the terms of the deal, Oshkosh, Wisc.,-based Oshkosh will get a $482 million contract to complete the production design of what the Postal Service is calling the “Next Generation Delivery Vehicle.” The agreement also provides Oshkosh funds to pay for tooling and factory configuration needed before launching production.

It will be a purpose-built, right-hand-drive vehicle for mail and package delivery. The design will allow the vehicle to be equipped with either an internal combustion engine or a battery-electric powertrain. The Postal Service has told Oshkosh to ensure that the electric truck can be retrofitted to keep pace with electric vehicle technology advances.

Oshkosh will assemble 50,000 to 165,000 mail trucks over 10 years.

“Our century-long history of delivering products to customers, operating in some of the most demanding and severe conditions on the planet, uniquely positions us to bring exceptional reliability, safety, and maintainability to USPS’s Next Generation Delivery Vehicles,” said John Bryant, executive vice president, Oshkosh Corp.

The Postal Service said its efforts to replace the existing mail truck fleet would create vehicle orders that run into the billions of dollars over the next decade. Previous estimates have placed the cost for replacing the current mail trucks at more than $6 billion. The first of the new mail trucks will enter service in 2023.

“The NGDV program expands our capacity for handling more package volume and supports our carriers with cleaner and more efficient technologies, more amenities, and greater comfort and security as they deliver every day on behalf of the American people.,” said Louis DeJoy, postmaster general and USPS chief executive.

The post office now uses about 140,000 Grumman Long Life Vehicles for its main delivery service. Manufactured from 1987 through 1994, they need to be replaced. A 2014 audit from the USPS inspector’s office found that the current fleet could only meet the agency’s delivery needs through the 2017 fiscal year.

The agency spent more than $700 million in 2019 maintaining the vehicles. The average expense was about $5,000, but at least 10,000 trucks needed an average of more than $12,000 of work.

The Postal Service began planning the fleet’s replacement with a new purpose-built vehicle more than five years ago. The post office expected to place the first trucks in service during the federal government’s 2018 fiscal year. Still, many delays, including the latest caused by the COVID-19 pandemic, have hampered the program.

The new vehicles will be a significant upgrade from the old trucks now used by letter carriers.

The Postal Service said the new design vehicles would include air conditioning, heating and improved ergonomics. They also get the technology that is now ubiquitous in passenger vehicles, including 360-degree cameras, advanced braking and traction control, airbags, a front- and rear-collision avoidance system that includes alerts and automatic emergency braking.

The new mail trucks will have greater cargo capacity designed to handle the eCommerce boom.

At one point Ford was working with Oshkosh on a prototype mail truck based off its Transit cargo van. But it’s not clear whether Ford is still involved in the program.  The automaker declined to comment and an Oshkosh executive also would not talk about suppliers for the program.

“We have teamed up with industry leaders whose proven subsystems and components speak to the quality of the Oshkosh NGDV offering. We will be able to supply more information about the supply base in the future,” said Tom Quigley, vice president and general manager, government programs at Oshkosh.

The Oshkosh contract was a blow to Workhorse Group, a small Loveland, Ohio, electric vehicle company that was competing to build the new mail truck and had presented a battery-electric prototype. Shares in the company fell almost 50% to $16.47 on Tuesday.

 




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