FedEx, USPS Near Deal on Alliance

The U.S. Postal Service and FedEx Corp. (FDX) are about to enter a delivery alliance, and a vote may be held at Monday's Postal Service Board of Governors meeting, the Wall Street Journal Online reported Monday.

FedEx would use its planes to haul Priority Mail and Express packages for the postal service, the story said.

However, USPS would not deliver slower-moving ground parcels for FedEx in rural areas that are not currently served by the Memphis-based company’s ground network, the Journal said.

Emery Worldwide Airlines – a unit of CNF Inc. (CNF) that cancelled an agreement late last year to handle Priority Mail shipments for USPS – is trying to stop the deal.

Emery’s Priority Mail contract with USPS ended on Jan. 7. Emery asked to end the contract early because it said the deal was too much work for the amount of remu-neration. (See "Emery Worldwide, Postal Service Accelerate Priority Mail Divorce)

But Emery – which still carries Express Mail for the postal service – went to court on Friday to try to keep FedEx from becoming USPS’ new partner, according to the Wall Street Journal Online.

Emery said the deal would result in termination of the Express Mail contract 13 months before it was set to expire.

Sources said the postal service’s governing board was set to consider the alliance Monday, the Journal reported.

The proposed deal is likely to raise antitrust concerns, but the incoming Bush administration may handle them differently than the Clinton administration would have.