By UPS has secured a significant contract with the United States Postal Service (USPS), becoming its primary air cargo provider, a role previously held by FedEx. Effective immediately, UPS will handle the majority of USPS’s air cargo operations within the United States. UPS CEO, Carol Tomé, expressed enthusiasm for the partnership, highlighting the collaborative effort to develop innovative solutions.
The announcement, made public on April 1, underscores UPS’s strategic significance, headquartered in Georgia. Meanwhile, FedEx disclosed that its domestic transportation agreement with USPS will conclude on September 29 after failed negotiations. FedEx expressed willingness to continue as the primary air mail carrier under agreeable terms, but discussions fell through, prompting FedEx to reassess strategies.
Reflecting on over two decades of collaboration, FedEx highlighted shifts in operational priorities and the need to adapt to market dynamics. The conclusion of the contract prompts FedEx to reconfigure its network for enhanced efficiency. Structural adjustments aimed at reducing costs associated with USPS volumes are on FedEx’s agenda.
Amid challenges evidenced by a decline in fourth-quarter revenues and ongoing efforts to streamline operations, UPS’s new role presents an opportunity for growth. Despite plans to trim its workforce in response to market pressures, securing the USPS contract strengthens UPS’s market position.
