Massive USPS contract to modernize vehicle fleet awarded to Oshkosh Defense

The U.S. Postal Service announced on Tuesday that it had chosen a company to help it carry out a “dramatic” multibillion-dollar modernization of its delivery vehicle fleet.

The Postal Service awarded the contract to Wisconsin-based Oshkosh Defense, which will help the agency reduce its costs and transition away from greenhouse gas-emitting technologies to cleaner solutions.

The agency said that as part of its initial $482 million investment, Oshkosh Defense will finalize the vehicle design and assemble as many as 165,000 vehicles over the course of a decade.

“The contract is the first part of a multibillion-dollar, 10-year effort to replace the Postal Service’s delivery vehicle fleet, one of the world’s largest,” USPS said in a statement, noting that it has more than 230,000 vehicles in every class.

USPS NOTCHES QUARTERLY PROFIT AMID SURGE IN COVID-DRIVEN ECOMMERCE SHOPPING

The award is an indefinite delivery, which means the Postal Service will be able to order more vehicles beyond the initial investment. Overall, the contract is expected to be of multibillion-dollar value.

The next-gen delivery vehicles are expected to appear on the road in 2023. They will include air conditioning, heating, 360-degree cameras, advanced braking and traction control, air bags, collision avoidance systems, as well as increased cargo room to evolve alongside a growing ecommerce business.

The plan to update its delivery fleet is part of a broader 10-year undertaking by USPS to become the “preferred delivery service provider for the American public.”

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Shares of Oshkosh Defense jumped more than 10% on Tuesday.

As previously reported by FOX Business, USPS reported a quarterly profit during its most recent financial results, largely driven by an uptick in ecommerce shopping due to the ongoing pandemic.

The positive news came with two caveats, however, including a note that the loss for the quarter would have been $650 million excluding adjustments that were made to non-cash workers’ compensation and a temporary peak surcharge, as well as warnings that the results may not be sustainable.

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