USPS Ditches FedEx, Signs Deal With UPS as Its New Primary Air Cargo Provider

The United States Postal Service has ended its long-term partnership with FedEx and struck a deal with United Parcel Service (UPS) for air cargo service. Simply put, USPS replaced its long-time air cargo provider after a failed negotiation for a contract extension.

Forbes reports that UPS confirmed on Monday, April 1, that it will become the USPS's new primary air cargo service provider. The global shipping and logistics company replaced FedEx and called its deal with the postal service agency a “significant partnership expansion.”

End of FedEx and USPS Business Collaboration

It was reported that FedEx and USPS’ talks about contract extension ended on March 29 without reaching an agreement, so their partnership will end at the original expiration. This information was also indicated in the former’s SEC filing, which was filed on April 1.

As a result, the team-up ended, and USPS immediately looked for a replacement, which turned out to be UPS. The financial terms of the deal between the new partners were not disclosed. The latter’s spokesperson, Glen Zaccarra, also told Forbes that they do not have other information to share except for what was already reported about the deal.

FedEx’s Statement and USPS Shift

USPS revealed that its cooperation with UPS is set to begin on Sept. 3, when its contract with FedEx officially expires. The initial agreement will be in effect for a minimum of 5 and a half years.

“We have long said we would extend the contract with the USPS if we could agree to commercial terms in the best interests of FedEx shareholders,” FedEx said in a statement via press release regarding the expiration of its USPS contract.

The company added, “Although we were unable to reach mutually agreeable terms, we remain committed to delivering outstanding service through the completion of our contract in September.“

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