U.S. Postal Service drives multi-billion dollar fleet modernization plans
The U.S. Postal Service (USPS) will replace 165,000 ageing vehicles with partly electric-powered delivery vans over the coming decade in a long-awaited multi-billion dollar fleet modernization drive.
The postal operator has awarded a contract initially worth $482 million to Oshkosh Defense to design and deliver a ‘next generation delivery vehicle’ (NGDV), bypassing rival supplier Workhorse. The full fleet modernization is expected to cost billions of dollars.
The contract announcement comes just weeks after President Biden suggested all federal government-owned organizations should move towards fleets of electric vehicles to help tackle climate change. USPS has been planning a fleet modernization for years but had delayed a decision due to financial problems.
USPS said the historic investment in the most dramatic modernization of its fleet in three decades is part of a soon-to-be-released plan to transform its financial performance and customer service over the next 10 years through significant investments in people, technology and infrastructure as it seeks to become ‘the preferred delivery service provider for the American public’.
Cleaner technology and more capacity
Postmaster General and USPS Chief Executive Officer Louis DeJoy said: “As the American institution that binds our country together, the U.S. Postal Service can have a bright and modern future if we make investments today that position us for excellence tomorrow.
“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.”
“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.”
$482m initial contract
Under the contract, Oshkosh Defense, primarily a maker of military vehicles, will finalize the production design of the Next Generation Delivery Vehicle (NGDV) — a purpose-built, right-hand-drive vehicle for mail and package delivery — and will assemble 50,000 to 165,000 of them over 10 years. The first NGDVs are estimated to appear on carrier routes in 2023.
USPS explained that the vehicles will be equipped with either fuel-efficient internal combustion engines or battery electric powertrains and can be retrofitted to keep pace with advances in electric vehicle technologies. The initial investment includes plant tooling and build-out for the U.S. manufacturing facility where final vehicle assembly will occur.
The NGDV vehicles will include air conditioning and heating, improved ergonomics, and some of the most advanced vehicle technology — including 360-degree cameras, advanced braking and traction control, air bags, a front- and rear-collision avoidance system that includes visual, audio warning, and automatic braking. The vehicles will also have increased cargo capacity to maximize efficiency and better accommodate higher package volumes stemming from the growth of eCommerce.
30-year-old delivery vans
The contract is the first part of a multi-billion-dollar 10-year effort to replace the Postal Service’s delivery vehicle fleet, one of the world’s largest. The Postal Service fleet has more than 230,000 vehicles in every class, including both purpose-built and commercial-off-the-shelf (COTS) vehicles. Approximately 190,000 deliver mail six, and often seven, days a week in every U.S. community. The NGDV, along with other COTS vehicles, will replace and expand the current delivery fleet, which includes many vehicles that have been in service for 30 years.
The Postal Service said it awarded the Oshkosh Defense contract in accordance with competitive Postal Service procurement policies after extensive testing of prototype vehicles, evaluation of offered production proposals, and discussions of technical specifications with the offerors.
The award is 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 over a fixed period of time, in this case,10 years. Oshkosh Defense is evaluating which of their several U.S. manufacturing locations is best suited to potentially increase the production rate of the NGDV.
