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Postal Service to Start Negotiations for Giant Mail Truck Contract

August 11, 2020 by Jerry Hirsch, @Jerryhirsch

After years of delays, the U.S. Postal Service is launching the final stage of entering an estimated $6 billion contract to replace the agency’s aging fleet of delivery vehicles.

The deadline for four separate company teams to provide contract proposals to build the new truck passed on July 14. The Postal Service told Trucks.com that it will now begin the evaluation of the proposals and start negotiations.

The Postal Service has said the contract could be worth more than $6 billion of business to build as many as 180,000 delivery vans. It also is looking at splitting the giant order between multiple parties. While several foreign companies are bidding for the business, the contract calls for the mail truck to be assembled in the U.S.

“An award(s) is currently planned for the production phase by the end of the calendar year,” the agency said in a statement to Trucks.com.

When it launched the process to replace its main delivery truck, the agency said it expected to have a contract in place by now. But the program has been hampered by multiple delays with the Covid-19 pandemic making up the most recent. The new truck will be known as the Next Generation Delivery Vehicle, or NGDV.

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.

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. 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 percent increase over the prior year.

The old aluminum-bodied trucks also are fire-prone. At least 14 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 167 fires since 2014.

At least for separate teams are in the running. Each has previously has provided prototype vehicles to the Postal Service for evaluation.

BIDDING TEAMS

There are just three teams left, but one of the teams has split up.

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 was another but pulled out in the past week, according to the Postal Times. Mahindra was 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, leaving Workhorse to continue on its own. Workhorse paid $7 million for intellectual property related to the truck and acquired the right to bid for the contract.

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 August 31, 2020
The earliest new mail delivery trucks will replace the U.S. Postal Service's aging and troubled fleet is January 2022, according to a new report by the service’s Office of the Inspector General.

45 Responses

  1. Dolf

    Mahindra has withdrawn and written this off as a loss. It was in the news last week.

    Reply
    • Jerry Hirsch
      Jerry Hirsch

      The article has been updated to reflect that development with a credit to the Postal Times, where it was reported.

      Reply
  2. William

    V.T Hackney did not withdraw, they were bought out by Workhorse and Workhorse took over the prototype

    Reply
  3. Jasmine M.

    “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, leaving Workhorse to continue on its own.”

    VT isn’t even worth mentioning. This happened months ago, they paid them and split on good terms. Now workhorse has big brother lordstown if they need help building. The article makes it sound like they are out and/or don’t have a body manufacturer anymore, essentially selling a car with no body / facepalm

    Reply
    • Jerry Hirsch
      Jerry Hirsch

      The article has been updated to reflect Workhorse is still bidding and there is a link to a Workhorse SEC filing with some minimal detail.

      Reply
  4. M. Cole

    Fake News we have been waiting for new delivery vehicles for years. What has Congress done with all the money!!!!! Where are all the honest good Journalists that ask and find out these answers!

    Reply
  5. Michelle Collins

    Maybe the next thing to write about?
    “Ford Recalls 500,000 Edge, Lincoln MKX Crossovers for Brake Issue”

    Reply
    • WOLFWAGON

      I was really hoping Mahindra would have hung in there and gotten at least a piece of the contract to give them a presence here in the U.S. to finally get their pick up here. Ford will probably get a bulk of the contract with one the other two getting a smaller piece

      Reply
      • Robin Ramey

        Postal service said the choice would be impartial. Why would they chose Ford /Oshkosh when they offer an internal combustion vehicle! With higher maintenance costs and higher fuel costs and the pollution aspect! Really wouldn’t make any sense!

  6. Lee Brushwood

    With a contract that size you would think there would be a substantial amount of bids?? But you’re dealing with the Gov’t. And we all know what that’s blike or can be like!!!

    Reply
  7. 8804

    Workhorse is a us builder which means job economy growth you should go with America made

    Reply
    • Derek

      While Workhorse is my favorite, all 3 companies in the running will have their vehicles made in America.

      Reply
  8. k

    LOL. alot a RH traders in comments pushing the EV. You will all be very disappointed when Oshkosh/ford receives contract.

    Reply
    • Robin Rameu

      I really would have to think the postal delivery aspect of going box to box up to 700 stops a day favors the electric vehicle. Instant on instant off. No starting or shutting down a vehicle!

      Reply
    • Jason

      I don’t think ford is even offering a fully electric option…and the grant specifically states 70% of the grant goes to 0 emissions vehicles.

      Reply
  9. Bob Wood

    I believe that Workhorse will receive the USPS Contract. They are a US based manufacturer. They already have the truck specifically designed for the post office ready to go and it’s all electric. They have the facilities. They also have the patent for the drone delivery system that will be beneficial to the post office in the future. One of the best things going for this company is Steve Burns. He is incredibly bright, innovative and a very good business man. I’m confident investing in this company regardless of the US Postal Contracts outcome. They have a bright future ahead.

    Reply
    • James McKown

      I believe Workhorse would be a good choice. But then USPS would have to have a lot of charging stations installed and from what I have read their truck only has 100 mile range. I know some delivery drivers that told me they drive over 100 miles a day.

      Reply
  10. Pat Hanley

    Could not come fast enough. A lot of very dedicated postal delivery workers driving non air conditioned trucks in 100 degree heat. Add another 10-12 degrees inside the cab.

    Reply
  11. Wesley

    What about all the RAM ProMaster vans USPS has purchased? Several thousand from what I can see on a simple search. I see them all the time on car carriers, painted and ready to go. There has even been some diliveries in our area with them.

    Reply
    • John Crawford

      Those will amount to something like 17-24,000 vehicles being manufactured and delivered in the short term. They appear to have some major drawbacks, like swinging doors, limited entry to cargo (the driver is walled off from the cargo area and has to go outside the vehicle a lot) and limited cab space. One could assume those are being put into service in the short term due to the fire-prone nature of the LLV.

      Reply
      • k

        Where do you get that information? It is wrong. That came from a house bill that was NOT PASSED. Sorry dude.

    • Lkimura

      The USPS says they would like to start receiving production versions of the NGDV in Jan 2022. Considering the time required to set up technology factory and get suppliers lined-up most experts expect a winner to be announced this year, probably before re fiscal year ends in September. I think this will happen as technology USPS is currently spending over $700 million/year to keep telling ancient LLVs on the road.

      Financial experts seem to really like Workhorse’s chances, the value of their stock has increased by about 15 times since May.

      Reply
      • k

        Those are not “experts”… they are Robinhood traders. Workhouse stock could be at 100 dollars a share. It doesnt change the fact they will not get this contract. They are woefully incapable of producing this quantity.

  12. Satya Joshi

    Workhorse deserves the contract, they already have trucks on the ground that have run for millions of miles, not just prototypes. They are an All American company and will provide jobs that are badly needed by American people in these tough times. Also their vehicles are fully electric, which is going to be almost mandatory in very near future. They are great from the perspective of global warming. There are far too many reasons to choose them. I hope postal service makes the wise decision.

    Reply
  13. Doug Grinbergs

    Too bad Tesla already overextended with umpteen projects to have submitted an all-electric proposal, perhaps im conjunction with another player

    Reply
  14. James

    Meanwhile the Post Office is buying Mercedes Benz vans instead with a usps badge on the grill. What a joke. Waste of taxpayer money. Pick a brand already the already has the little vans built. Chevy . Ram.

    Reply
    • Bob Johnson

      Ram is the Mercedes Benz van. Chrysler which made Dodge Ram vans is owned by Daimler Benz since 1998. Daimler-Benz is the manufacturer of Mercedes Benz so you are seeing USPS Ram Vans.

      Reply
      • Jerry Hirsch
        Jerry Hirsch

        Daimler no longer owns Chrysler and the Ram brand. The Ram ProMaster and ProMaster City are varients of Fiat vans.

  15. Steve Britt

    Oshkosh should not be selected due to the fact that they have not offered an electric vehicle! I think Workhorse is the best offering and they get my vote.

    Reply
  16. Hoss

    I am hearing the contract might be awarded by the eow. Workhorse will get 75% of the contract and they are the only company certified to meet california’s standards. Maga

    Reply
    • k

      Its 75% by 2035….. All of the Oshkosh trucks will be manufactured well before then. No worries

      Reply

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