Postal Service Delays Production Contract for New Mail Truck

May 12, 2020 by Jerry Hirsch, @Jerryhirsch

The U.S. Postal Service pushed back a plan to award an expected $6 billion in contracts for the next-generation mail truck later this year.

In a filing, the agency said it moved the deadline for four separate company teams to provide contract proposals to build the new truck until July 14. The proposals were originally due on March 27.  Each of the teams previously has provided prototype vehicles to the Postal Service for evaluation.

The agency told Trucks.com that it pushed back the deadline because of “the current COVID-19 pandemic and its impact on Postal Service and supplier operations.”  The USPS has provided very few details about the status of its program to replace aging mail trucks.

The Postal Service has previously said the contract could be more than $6 billion of business to build as many as 180,000 delivery vans. It also has said the contract could be split between multiple parties and that the mail truck needed to be assembled in the U.S.

AGING TRUCKS

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 office of the USPS inspector general found that the current fleet was expected to only meet the delivery needs of the agency through the 2017 fiscal year. But delays in the replacement program have kept the trucks in operation.

The current trucks lack essential functions such as air conditioning, airbags or anti-lock brakes. They are too small to accommodate the e-commerce packages that make up the bulk of the mail today. With an average age of about 28 years, they are past their expected life span. The vehicle is a custom body manufactured by Grumman mounted on a Chevrolet truck chassis that the automaker stopped making ages ago.

The vehicles are taking more time to maintain and repair, according to the Postal Regulatory Commission,’s 2019 fiscal report. Maintenance workhours required to keep its entire fleet on the road rose 2.8 percent last year. The measure rose by 3.9 percent in 2018.  The post office spends an average of $50.66 per labor hour for motor vehicle service, according to the report.  The agency spent more than $1.2 billion on what it designates as vehicle maintenance services and rural carrier equipment maintenance last year, a 2.5% increase over the prior year.

The old aluminum-bodied trucks also are fire-prone. At least 10 of the U.S. Postal Service’s aging Grumman LLV delivery trucks caught fire so far this year, according to a tally by Postal Times. That makes 163 fires since 2014.

The agency is working to replace the trucks even as it deals with the economic fallout from the coronavirus pandemic. It is predicting $13 billion in lost revenue because of the plunge in U.S. economic activity during its current fiscal year.

POLITICAL FIGHT

But the service is caught in a political battle between President Trump and Jeff Bezos, the chief executive of Amazon who also owns the Washington Post. Trump sees the news organization as a political nemesis. Earlier this month the Postal Service’s board of governors named Trump campaign donor and North Carolina businessman Louis DeJoy as the new postmaster general. DeJoy starts on June 15 and replaces Megan Brennan.

Trump wants the Postal Service to raise rates for package delivery, which in turn would raise Amazon’s expenses. But a Trump administration task force review of the Postal Service’s operations found that package delivery remains a profit center for the agency. Higher rates could push Amazon and others to use or develop other delivery services.

Amazon is already investing heavily in delivery capacity. Last year Amazon reached an agreement to purchase 100,000 Rivian electric trucks that will start service as early as 2021.

The giant retailer plans to have 10,000 of the new electric vehicles on the road as early as 2022.

The Postal Service started its mail truck replacement process in 2015. It awarded $37.4 million in contracts to six suppliers to produce 50 prototype mail vehicles a year later. Several of the suppliers have since dropped out of the bidding.

BIDDING TEAMS

There are four left, but one of the teams has split up, leaving its status in the bidding unclear.

Turkey-based Karsan, which makes commercial electric vehicles, teamed with long-time USPS supplier Morgan Olson of Sturgis, Mich. The team has offered a plug-in hybrid engine option for the new mail truck.

Mahindra Automotive North America is another. Mahindra is offering a gasoline or mild-hybrid powertrain option, according to government filings.

Workhorse Group, a small Loveland, Ohio, electric truck builder, had teamed up with truck body maker VT Hackney. But it said VT Hackney has dropped out of the project.

The fourth team, specialty truck- and military vehicle maker, Oshkosh Corp., of Oshkosh, Wisc., and Ford Motor Co. of Dearborn, Mich., already have U.S. manufacturing facilities. They based their internal combustion engine entry on the Ford Transit cargo van

Jerry Hirsch October 21, 2019
The U.S. Postal Service fails to act as its mail delivery trucks burn up at an alarming rate.

One Response

  1. Stephen Webster

    The U S post office needed new delivery trucks 2 years ago. The bed thing is a 5 billion dollar one time grant with 3 billion to replace transport inside the post up to one billion for building upgrading and automation. The other one billion for payroll assistance for this year. Amazon doesn’t treat employees or subcontractors as good as the post office or Costco. Rural parts of the U S need a well run delivery system with a 20 percent wage subsidy for all post offices that less than 30,000 customers and more than 50 miles from a city of more than 100,000 people. Amazon and Fedex and some food processing places need a complete inspection and be made to pay the costs of any employee or subcontractors who get hurt sick 70 percent of their the average state wage until able to return to work in the event of death until age 65. The post office has much better medical treatment and protection than some of the competitors. The best choice is raised level of medical treatment and pay in the event of a work related medical event.

    Reply

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