Usps Fedex Agreement

Usps Fedex Agreement

MEMPHIS, Tennessee, February 23, 2017 – FedEx Corp. (NYSE: FDX) announced today that its subsidiary FedEx Express has entered into a renewal of the express air transportation contract with the United States Postal Service, originally concluded on April 23, 2013. The contract amendment extends the agreement until 29 September 2024. The United States Postal Service (USPS) has renewed its express air transportation contract with FedEx Express. The contract was originally concluded on 23 April 2013. The amendment extends the agreement until 29 September 2024. FedEx also said it was preparing to remove some 5,000 drop boxes from U.S. Postal service sites in about 340 metropolitan areas, in line with a separate agreement that expired in June. «We are pleased to be able to extend this agreement and continue the excellent service that FedEx Express has provided to the USPS for over 16 years,» said David J.

Bronczek, President and Chief Operating Officer of FedEx Corporation. «This contract provides USPS with the operational security and flexibility they expect from FedEx.» Shares of Memphis, Tennessee-based FedEx fell 0.9 percent in afternoon trading to $91.04 on the New York Stock Exchange and rose 9 percent this year. The aerial lift contract is a significant expense for the postal service and a major boost to FedEx`s finances and operations. The company`s airport-to-airport network would be forced to undergo big changes if the postal service gets an air elevator contract with a competitor like UPS, Maciuba said, since the contract likely «subsidizes» this current operating model. For years, the federal government has had the bulk of its contracts with the USPS, which has received about $29.3 million in revenue. According to a Washington Times article, «a check of the records shows that the federal government relies more on UPS. In 2008, 358 orders were issued by the federal authorities. This figure rose to 925 contracts in 2012. In the first six months of 2013, UPS was awarded 635 contracts. FedEx received more than $2 billion in postal payments in fiscal 2019, according to a study by David Hendel of Husch Blackwell LLP`s Postal Service Contracting Practice. That was about four times more payment than for the second provider.

FedEx declined to comment on the notified changes, but made it clear in applications that it relied on the postal service. According to the annual financial report, risks to FedEx`s business due to COVID-19 include «changes in the commercial and financial strength of the U.S. Postal Service.» The amended contract is expected to bring FedEx Express approximately $1.5 billion in revenue annually. FedEx Express offers TRANSPORTATION of USPS Priority Mail Express and Priority Mail from airport to airport in the United States….

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