The U.S. Postal Service to Spend up to $6 Billion to Update its Aging Fleet of Delivery Vehicles

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【Summary】​The United State Postal Service (USPS) is spending up to $6 billion to upgrade aging fleet of vehicles with ones that are much more efficient and reliable for the delivery of parcels. The 10-year contract was awarded to Wisconsin-based defense contractor Oshkosh Defense. The Investment is part of a decade-long plan to Transform the USPS Into the preferred delivery service provider for the American public.

FutureCar Staff    Feb 23, 2021 4:15 PM PT
The U.S. Postal Service to Spend up to $6 Billion to Update its Aging Fleet of Delivery Vehicles
The new USPS vehicles will replace an aging fleet and include modern technology.

The United State Postal Service (USPS) is ready to upgrade its aging fleet of vehicles with ones that are much more efficient and reliable for the delivery of parcels. The familiar blue and white postal trucks on average are 30-years-old and the USPS said its spending roughly $5,000 in maintenance annually on each truck to keep them on the road.

The 10-year contract to upgrade the aging USPS fleet was awarded to Wisconsin-based defense contractor Oshkosh Defense, a unit of Oshkosh Corp that builds military vehicles.

Under the initial $482 million investment, Oshkosh Defense will finalize the production design of the Next Generation Delivery Vehicle (NGDV). It will be a purpose-built, right-hand-drive vehicle designed for mail and package delivery. The contract could be worth more than $6 billion in total. 

The first NGDVs will be utilized on carrier routes by 2023.

"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," said Postmaster General and USPS Chief Executive Officer Louis DeJoy. "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."

Oshkosh will build 50,000 to 165,000 of the postal vehicles over the next 10 years. The vehicles won't be entirely electric however. The delivery vehicles will be equipped with either fuel-efficient internal combustion engines or battery electric powertrains designed to be retrofitted in the future as improved electric vehicle technologies are developed.

The initial $482 million investment also includes plant tooling and build-out for the U.S. manufacturing facility where final vehicle assembly will occur, the USPS said.

The Postal Service's delivery vehicle fleet is one of the world's largest, totaling some 230,000 vehicles in every weight class, including both purpose-built and commercial vehicles purchased from other manufacturers.

The NGDVs and other production vehicles will replace and expand the current USPS delivery fleet. Oshkosh had teamed up with Ford Motor Co on its proposal with a vehicle based on Ford's Transit van.

Approximately 190,000 vehicles in the USPS fleet are used for daily mail delivery in every U.S. community and they are the vehicles that the public is likely most familiar with.

The new postal vehicles will bring modern technologies to the postal fleet to improve efficiency and the comfort of employees, which is often lacking in most of the current vehicles in service.

The NGDV vehicles will include air conditioning, heating, improved ergonomics, and some of the most advanced vehicle technology — including 360-degree cameras, automatic emergency braking and traction control, air bags, as well as a collision avoidance system that includes visual, audio warnings.

The vehicles will also have increased cargo capacity to maximize efficiency and better accommodate higher package volumes stemming from the growth of eCommerce.

"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."

The investment is part of a 10-year plan to transform USPS into the preferred delivery service provider for the American public, the USPS said.

The USPS is often criticized for its slower delivery times than that of FedEx and also e-commerce giant Amazon, which delivers most packages within two days anywhere in the continental U.S. for Prime members. 

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.

The contract awarded to Oshkosh Defense is what's known as a 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, which in this case is 10 years.

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