The Postal Service has awarded a 10-year contract to Oshkosh Defense to create its next-generation delivery vehicle fleet.

USPS expects the first delivery vehicles will arrive on delivery routes by 2023. The next-generation delivery vehicles will run on fuel-efficient internal combustion engines or electric batteries. The Postal Service says vehicles can be retrofitted to keep pace with advances in electric vehicle technologies

Postmaster General Louis DeJoy said the next-generation delivery vehicle program will expand the agency’s capacity to deliver greater volumes of packages, and would provide greater efficiency.

“Our fleet modernization also reflects the Postal Service’s commitment to a more environmentally sustainable mix of vehicles,” DeJoy said in a statement. “Because we operate one of the largest civilian government fleets in the world, we are committed to pursuing near-term and long-term opportunities to reduce our impact on the environment.”

The contract award, and the emphasis on clean energy, follows President Joe Biden’s executive order last month directing all federal agencies — including the Postal Service — to move toward “clean and zero-emission vehicles.” A National Climate Task Force led by the heads of most Cabinet-level agencies would oversee this transition.

The next-generation vehicle contract award is a key part of a 10-year business plan that USPS expects to release in the coming weeks. The strategy is looking at making infrastructure investments and giving non-career postal employees a clearer path to obtaining a career position.

Under an initial investment of $482 million, Oshkosh Defense will finalize the design of the Next Generation Delivery Vehicle built to help the agency deliver mail and packages.

USPS announced the next-generation delivery vehicle contract award the day before its leaders will testify about agency reform before the House Oversight and Reform Committee.

DeJoy and the new USPS Board of Governors Chairman Ron Bloom will testify before the committee and discuss how to put the agency on firmer financial footing. They’ll be joined by agency inspector general Tammy Whitcomb and the president of the American Postal Workers Union Mark Dimondstein.

Lawmakers introduced the USPS Fairness Act earlier this month, which would eliminate the agency’s mandate to pre-fund retiree health benefits well into the future.

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