The latest U.S. Postal Service (USPS) Next Generation Delivery Vehicles (NGDVs) have been a hit with drivers since they started hitting the streets in Georgia last month, according to a report by the Associated Press. However, with a $5 billion price tag, taxpayers may not be as thrilled about the investment.
USPS prides itself on being primarily self-funded through stamp sales, products, and services. Despite this, USPS did receive $3 billion from the Inflation Reduction Act and has a $50 billion unfunded pension liability that taxpayers may end up covering, as explained by Reason‘s Eric Boehm.
USPS is expecting to invest a total of $9.6 billion in new vehicles. A significant portion of this funding comes from the U.S. Department of the Treasury, meaning taxpayer money is involved, prompting the public to question how the funds were allocated.
Out of the planned 106,000 new delivery vehicles to be purchased by 2028, 60,000 will be NGDVs. While exact prices are not readily available, the order of 50,000 vehicles in March 2022 was valued at $2.98 billion, setting the per-unit price of the NGDV at $59,600.
The duck-inspired NGDV is manufactured by Oshkosh Defense, the same company known for producing the intimidating Medium Caliber Weapon System. These NGDVs will gradually replace USPS’s iconic Grumman Long Life Vehicle (GLLV) over the next four years.
Did you know the new NGDV comes with built-in safety and ergonomic features designed to enhance both driver and pedestrian safety, while also making delivery routes more efficient?
If you want to do work that makes a difference in people’s lives, visit https://t.co/TKYGgifAOE pic.twitter.com/mGcRQiMVLL
— Oshkosh Defense (@OshkoshDefense) August 14, 2024
The new NGDVs from Oshkosh boast safety features like airbags, anti-lock brakes, collision sensors, and blind-spot monitoring, which are standard in modern vehicles. The contract for 50,000 NGDVs was competitively awarded to Oshkosh in 2021, although the per-unit pricing raises questions about the competitiveness of the process.
Initially, Postmaster General Louis DeJoy planned for 10% of the NGDVs to be electric, but following lawsuits and pressure, the electric vehicle proportion was increased to over 50% by July 2022 and further to 75% by December 2022.
Electric vehicles tend to be about 17% more expensive than their internal combustion engine counterparts, according to Kelley Blue Book. Considering this, the total value of the Oshkosh Defense contract for NGDVs could be closer to $3.31 billion, with an average price per NGDV of $66,200.
Comparing this to the price of the 2025 Mercedes-Benz e-Sprinter used by FedEx, which has an MSRP of $61,180, the Oshkosh NGDV comes at a higher cost. The NGDV price is also significantly higher than the non-electric Mercedes-Benz Sprinter’s 2021 MSRP of $42,430.
Overall, the USPS-NGDV program has been a costly endeavor, spanning almost a decade since its inception in 2014. Private competitors like UPS, FedEx, and DHL have seen growth in the meantime, showing that outsourcing vehicle manufacturing to the military-industrial complex may not be necessary for mail delivery.
