The U.S. Army and Air Force have agreed to replace the C-23 two engine transports the U.S. Army National Guard operates, with 145 new aircraft of approximately the same capability. The air force will get about half these aircraft, and the army the rest. But both services would establish joint maintenance e and support facilities, in order to keep the costs down.
Currently the Army National Guard is allowed to operate 44 of the two engine (propeller) C-23 aircraft. This is a freight version of the British Shorts 330 passenger airliner. The 12 ton C-23 can carry up to 3.5 tons of cargo, or up to 30 troops. The C-23s are twenty years old, and efforts to get a replacement, especially a larger and more numerous replacement, initially ran into air force opposition. After all, the air force has 500, 75 ton, C-130s. But in Iraq, the army C-23s have proved invaluable in getting priority army cargos where they are needed.
Despite all the air force C-130s there, the army has to wait up to five days to get a C-130. The air force has the final word on what their C-130s carry, and that's why the army wants some of its own transports. The army originally asked for 128 C-23 replacements, but the air force protested, and the current deal was worked out. The new transport would be a militarized version of an existing transport (CN-235, C-295 and C-27J are most often mentioned, as is the navy C-2.) What all these aircraft have in common is greater capacity (about half the C-130s 20 ton load), and the ability to fly higher than the C-23s 20,000 foot maximum altitude (which prevents it from being used in Afghanistan).
The air force also sees a need for an aircraft smaller than their current C-130. They had some C-27s (basically, half size, two engine "C-130s"), but retired them in 1999 because they were too expensive to maintain, for the amount of cargo they moved. However, in wartime, a smaller "C-130" is far more useful for many situations where many smaller cargos have to be moved.