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.
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.
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.