January 23, 2013 9:00 AM, EST
Postal Service Losing Government Business to Private Sector

The U.S. Postal Service is losing some government shipping business to private-sector companies such as FedEx Corp. and UPS Inc., Bloomberg News reported Wednesday.

FedEx and UPS have more than 98% of the $337 million annual shipping spending by federal agencies, Bloomberg reported, citing a report by the Postal Service’s Inspector General.

According to the report, the major challenges faced by the USPS include pricing flexibility and the lack of two- and three-day guaranteed express delivery.

The Postal Service started bidding for U.S. General Services Administration contracts for federal agencies in 2009, while FedEx and UPS began in 2001, Bloomberg said.

U.S. Postmaster General Patrick Donahoe recently urged Congress to make postal reform a priority, as the service is losing some $25 million a day and has defaulted on $11.1 billion in Treasury payments.

UPS is ranked No. 1 and FedEx is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.