FedEx Corp. (
FDX) and the
U.S. Postal Service agreed last week to a package of seven-year agreements under which FedEx will carry Priority, Express and first-class mail on its airplanes between the nation’s airports and will place up to 10,000 of its purple-orange-and-white drop boxes at post offices around the nation.
The Postal Service will pay FedEx $6.3 billion for the air services; FedEx will pay the Postal Service up to $232 million to place the boxes; and FedEx expects to garner up to $900 million in new business from customers who use the drop boxes.
The deal will allow FedEx to get more efficiency from its fleet of 663 aircraft by utilizing the planes during the day, and will take business away from its rival CNF Inc. (CNF), whose Emery Worldwide Airlines subsidiary now carries USPS Express Mail. Emery also used to carry Priority Mail.
The FedEx-USPS deal, proposed by Postmaster General William J. Henderson in September, went forward Jan. 10 after a federal court turned down a CNF request to block it on grounds that the contract was let without competitive bidding.
The Court of Federal Claims, which refused to block the deal before the fact, will examine it now that the Postal Board of Governors has approved it. Postal representative Monica Hand said she has been told the court will rule on the legality of the deal by March 2.
For the full story, see the Jan. 15 print edition of Transport Topics. Subscribe today.
