Oshkosh Defense Wins Giant Mail Truck Replacement Contract

February 23, 2021 by Jerry Hirsch, @Jerryhirsch

After years of delays and deliberations, the U.S. Postal Service awarded a 10-year contract to Oshkosh Defense to produce the next mail truck.

The Postal Service said the program would launch “the most dramatic modernization of the USPS fleet in three decades.”

Under the terms of the deal, Oshkosh, Wisc.,-based Oshkosh will get a $482 million contract to complete the production design of what the Postal Service is calling the “Next Generation Delivery Vehicle.” The agreement also provides Oshkosh funds to pay for tooling and factory configuration needed before launching production.

It will be a purpose-built, right-hand-drive vehicle for mail and package delivery. The design will allow the vehicle to be equipped with either an internal combustion engine or a battery-electric powertrain. The Postal Service has told Oshkosh to ensure that the electric truck can be retrofitted to keep pace with electric vehicle technology advances.

Oshkosh will assemble 50,000 to 165,000 mail trucks over 10 years.

“Our century-long history of delivering products to customers, operating in some of the most demanding and severe conditions on the planet, uniquely positions us to bring exceptional reliability, safety, and maintainability to USPS’s Next Generation Delivery Vehicles,” said John Bryant, executive vice president, Oshkosh Corp.

The Postal Service said its efforts to replace the existing mail truck fleet would create vehicle orders that run into the billions of dollars over the next decade. Previous estimates have placed the cost for replacing the current mail trucks at more than $6 billion. The first of the new mail trucks will enter service in 2023.

“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.,” said Louis DeJoy, postmaster general and USPS chief executive.

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 USPS inspector’s office found that the current fleet could only meet the agency’s delivery needs through the 2017 fiscal year.

The agency spent more than $700 million in 2019 maintaining the vehicles. The average expense was about $5,000, but at least 10,000 trucks needed an average of more than $12,000 of work.

The Postal Service began planning the fleet’s replacement with a new purpose-built vehicle more than five years ago. The post office expected to place the first trucks in service during the federal government’s 2018 fiscal year. Still, many delays, including the latest caused by the COVID-19 pandemic, have hampered the program.

The new vehicles will be a significant upgrade from the old trucks now used by letter carriers.

The Postal Service said the new design vehicles would include air conditioning, heating and improved ergonomics. They also get the technology that is now ubiquitous in passenger vehicles, including 360-degree cameras, advanced braking and traction control, airbags, a front- and rear-collision avoidance system that includes alerts and automatic emergency braking.

The new mail trucks will have greater cargo capacity designed to handle the eCommerce boom.

At one point Ford was working with Oshkosh on a prototype mail truck based off its Transit cargo van. But it’s not clear whether Ford is still involved in the program.  The automaker declined to comment and an Oshkosh executive also would not talk about suppliers for the program.

“We have teamed up with industry leaders whose proven subsystems and components speak to the quality of the Oshkosh NGDV offering. We will be able to supply more information about the supply base in the future,” said Tom Quigley, vice president and general manager, government programs at Oshkosh.

The Oshkosh contract was a blow to Workhorse Group, a small Loveland, Ohio, electric vehicle company that was competing to build the new mail truck and had presented a battery-electric prototype. Shares in the company fell almost 50% to $16.47 on Tuesday.

 

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.

31 Responses

    • Jerry Hirsch
      Jerry Hirsch

      There will be some electric vehicles ordered as part of that. That is in the article

      Reply
    • Randall Rynearson

      That Picture is the Workhorse Electric Vehicle. I guess the media had planned ahead on Workhorse winning the contract without looking a the total cost of ownership picture from the bids. Oshkosh has invested heavily in electrification and although electric is a component it is not the solution for every use case no matter what some people think.
      Front wheel drive and 4 wheel drive are both options that were prototyped for testing by all.

      Reply
      • Randy

        Sorry my bad it isn’t workhorse’s prototype but looks close enough it is however stock picture not actual picture of the actual vehicle.

      • Ben

        Sure seems that way. No longer any mention of Ford in the announcements. The pictures released yesterday are not the design submitted by Oshkosh when bidding, which was based on the Transit. And Oshkosh is tooling to build this themselves. Which really has me scratching my head because then what was the point of several years of testing samples based on the Transit if they are now awarding a contract based on a de novo design?

  1. Chrissy

    The electric trucks would also save money on the industry. Because it would cut out the gas amounts they spend. It’ll be more eco friendly.

    Reply
  2. Concerned Investor

    No surprise here, WKHS was obviously not getting it. Seeing the CEO dump his stock was a red flag. Not seeing any WKHS trucks in the road was also a red flag. Not to mention WKHS didn’t advance to the final round of prototypes, and they weaseled their way back in by partnering with VT Hackney, who ended up quitting altogether. Workhorse was clearly never going to win any portion of this.

    Reply
  3. crabbymilton

    Why go to all of this fuss where a standard full size, mid size, or cargo mini van seems to work. They just bought a bunch of MERCEDES METRIS’s and those were supposed to be the new preferred vehicle. Unless they really want to move toward electric, perhaps this new thing is best. Time well tell.

    Reply
    • Edward

      1) Oshkosh is well tied into “military-industrial complex”, and is US based. 2) With the current Postmaster General, it’s about connections, not facts. 3) MB is German, so no go on that, and Frieghtliner has had bad experiences building for US gov. Basically MB & Frieghtliner build higher quality than US gov thinks federal laborers deserve. 4)Defense manufacturers don’t have any way to report on normal cost of maintenance, as gov has federal full time employees assigned to that task.

      5) US gov loves its defense contractor friends.

      No surprise really. And the vehicles won’t be so Pixar, but more Humvee (squarer) looking. Oshkosh has never really set up for stamping variable thickness sheet metal (into complex curves)

      Reply
      • Randall Rynearson

        Some Facts

        Oshkosh brands… Pierce (Fire Trucks) Jerr-Dan (Wreckers/Rotators) McNeilus (Refuse vehicles and Cement Mixers) Frontline (News Vans and Command /Control) JLG (Access Equipment) IMT (Service Vehicles and Truck Mounted Cranes) Oshkosh Airport Products (Airport Fire and Rescue, Snow Removal Equipment) Corvette Racing (Cool Fast Cars acquired with the Purchase of Pratt Miller) Oshkosh Defense (FMTV,MATV and JLTV vehicles that “Yes” are Armored not “stamped variable thickness sheet metal”)

        Just Great Products in each of their area of expertise not Just a “Defense Contractor”, and they share engineering resources to accomplish it.

        Oh, they made a $25 Million strategic investment in “Microvast”. They design and produce the correct electrification solutions for the size and purpose of specific vehicles.

        Total cost of ownership was included in the USPS request. I assume the Postmaster used it in the decision making process.

        All public information anyone can research (if they want to ).

    • Darryl

      The Metris’ are being used to convert smaller routes that are currently being serviced by carriers’ personal vehicles to government vehicles. They’re not big enough to handle a full-size route.

      Reply
  4. k

    Nice article, thanks again jerry. Good for US workers, and good for environment.
    Congrats Oshkosh.

    Reply
  5. Mike

    Will rural/city carriers have any design input? If not it’s a waste of money and time

    Reply
    • Darryl

      That’s a huge unknown. During the prototype testing phase, the test vehicles (of which the pictured vehicle was NOT one) were driven by actual mail carriers on their normal mail routes. They were polled frequently for feedback and I’m sure a lot of that went into the design of the mock-up they’re showing us. I understand that a LOT of problems were uncovered in all of the entries as well.

      Reply
  6. alfento

    Remember this comment when workhorse gets part of that contract, when the democrats revoke the deal with oskosh. yw

    Reply
    • Bruce Rizzo

      The DEM revoking the existing contract “MAY” depend on amount of contributions to the DNC or BIDEN whether through a direct contribution or through a Special Interest Group.

      I haven’t read through the RFP. Does it state that initial design prototype could be substituted during the proposal. Did OSHKOSH submit a 2nd prototype?
      Is there any cause for WKHS to challenge the Gov’t award? I don’t know, just asking.

      Reply
  7. PETER HALE

    And yet Amazon, UPS and DHL manage to get thousands more EV delivery trucks and much cheaper.

    Reply

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