USPS and FedEx Agree to New Contract

Aug 01, 2006 10:56 PM  By

The U.S. Postal Service and FedEx Express, a division of Memphis, TN-based FedEx Corp., have agreed to a new contract for domestic air transportation of postal shipments.

The new agreement is set to continue through September 2013, replacing the current contract, which was due to lapse in August 2008. That earlier contract, which was signed in 2001, was a first of sorts. “Back then, carriers in this space didn’t sign contracts amongst themselves,” says USPS spokesperson David Partenheimer. “People didn’t expect companies to work in cooperation with their competition.”

The new agreement is worth about $1 billion a year for a minimum of seven years. FedEx Express will fly about four million pounds of U.S. mail every business day.