Shipping and logistics giant UPS has secured a contract to become the primary air cargo carrier for the US Postal Service (USPS), marking the end of rival FedEx’s 20-year run in that role.
Georgia-headquartered UPS disclosed its “partnership expansion” with the postal service on 1 April, noting that its new contract to move the majority of USPS air cargo in the country is effective immediately, though it will take over from FedEx following a transition period.
“Together UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable and efficient integrated network,” says UPS chief executive Carol Tome.
Tennessee-based FedEx says its domestic transportation agreement with USPS will expire on 29 September in a decision made “following extensive discussions”.
FedEx had been open to extending its contract to be the USA’s primary air mail carrier “if we could agree to commercial terms in the best interests of FedEx shareholders”, but says it was unable to reach a favourable agreement.
Over the course of a “long and productive relationship for more than 20 years”, the company says its strategies have shifted from those of the postal service ”as we transform our networks and operations for the future”. At the conclusion of the contract, FedEx plans to adjust its network in a bid for greater efficiency and flexibility.
“The elimination of structural costs currently in place to support postal service volume will be addressed,” it says.
FedEx operates out Memphis International airport with a massive fleet of nearly 380 Boeing 757s, 767s, 777s, Airbus A300s and McDonnell Douglas MD-11s, according to Cirium fleets data.
With aircraft operations based in Louisville, Kentucky, UPS boasts a 280-strong fleet of jets, including 747s, 757s, 767s, A300s and MD-11s.
Both shipping companies also operate and charter hundreds of smaller feeder aircraft.
