UPS announced the company has been awarded a significant air cargo contract by the United States Postal Service. This award is effective immediately and greatly expands the existing relationship between the two organizations.
Following a transition period, UPS will become the USPS’s primary air cargo provider and move the majority of USPS air cargo in the US.
“Together UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable and efficient integrated network,” UPS Chief Executive Officer Carol B. Tomé said in a press release posted to the UPS website.
Financial terms of the deal were not disclosed.
USPS’s current air cargo contract with FedEx Corp. is set to expire in late September, according to The Associated Press. The agency said in a statement that its contract with UPS will be for a minimum of five-and-a-half years.
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 AP reported. The company said that negotiations ended on Friday, after extensive talks.
FedEx Express will continue to provide air transportation services domestically and to Puerto Rico until the contract expires on Sept. 29. UPS’s contract with USPS takes effect the next day.
