The U.S. Postal Service has launched what it calls the most dramatic modernization of its fleet in three decades, awarding a $482 million contract today for military contractor Oshkosh Defense to build a new generation of postal delivery vehicles offering increased cargo capacity to accommodate higher package volumes stemming from rapid e-commerce growth.
USPS has been struggling to find profits in recent years as it copes with broad changes in the parcel sector, and recently reported that 2020 marked the first fiscal year that it collected more revenue from package delivery than its traditional core business, first class mail.
Under terms of the contract, the Oshkosh, Wisconsin-based automobile manufacturer will deliver between 50,000 and 165,000 vehicles over the next decade, with the first units rolling out on carrier routes in 2023. USPS currently operates more than 230,000 total vehicles, with some 190,000 delivering mail.
With final design details still on the table, the Next Generation Delivery Vehicle (NGDV) will be a right-hand-drive vehicle for mail and package delivery, powered by a mix of both zero emission battery electric vehicles (BEV) and fuel-efficient low-emission internal combustion engine vehicles (ICE), Oshkosh said. With an option to be retrofitted to keep pace with advances in electric vehicle technologies, the NGDVs are intended to help the USPS to reduce its fleet costs and greenhouse gas emissions, and operate more sustainably.
The move is part of a larger USPS plan to transform the agency into the country’s “preferred delivery service provider.” Postmaster General Louis DeJoy has teased that plan for weeks, promising a “comprehensive restructuring and financial plan” when he released the agency’s quarterly earnings earlier this month.
“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,” DeJoy said in a release. “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.”