FILE - A delivery vehicle passes by a UPS depot, Thursday, June 29, 2023, in New York. UPS has received an air cargo contract from the United States Postal Service, significantly expanding on an existing partnership between the two. UPS said Monday, April 1, 2024, that it will become USPS's primary air cargo provider and move the majority of its air cargo in the U.S. following a transition period.
FedEx said in a regulatory filing that it wasn’t able to reach an agreement on mutually beneficial terms to extend its contract with USPS. The company said that negotiations ended on Friday, after extensive talks. During FedEx’s third-quarter conference call on March 21, Chief Customer Officer Brie Carere said that the company had provided its services to USPS for more than two decades and that the two sides were still in negotiations.
In recent years USPS has focused increasingly on lowering costs, and avenue is through transitioning from air freight to ground transportation. In February USPS Postmaster General Louis DeJoy said that USPS is looking to reduce its overall transportation costs by $3 billion over the next two years, which includes $1 billion cost savings already achieved in airfreight.