FedEx signs new 7 year contract worth $10.5 billion with USPS

USPS Press Release
Air Cargo Network Contract Award to FedEx

WASHINGTON – On April 23, 2013, the United States Postal Service awarded Federal Express Corporation (FedEx) a seven-year Air Cargo Network contract to provide domestic air transportation service for Priority and Express Mail. The current contract with FedEx ends in September 2013, and the new contract will begin in October 2013.

The Postal Service conducted a competitive procurement for the transportation of domestic mail products by air, incorporating new service performance requirements and improved contract terms and conditions.

Following a rigorous evaluation of technical aspects, pricing, and other factors in the proposals, the Postal Service determined that the FedEx proposal represented the best value. The new contract benefits postal customers by providing service improvements, capacity flexibility, and other planned operational improvements. Based on estimated volumes the new agreement is valued at approximately $10.5 billion over the seven-year term.

The new contract allows the Postal Service to continue a successful business relationship with FedEx.

FedEX Press Release

MEMPHIS, Tenn., April 24, 2013 — FedEx Corp. today announced that its FedEx Express subsidiary has entered into a new express air transportation contract with the United States Postal Service. The current contract ends in September 2013, and the new contract will begin in October 2013.

Under this seven-year agreement, valued at approximately $10.5 billion, FedEx Express will provide airport-to-airport transportation of USPS Express Mail and Priority Mail within the United States.

“FedEx Express will continue the outstanding service that we have provided to the USPS for the past 12 years under this new agreement,” said David J. Bronczek, president and chief executive officer of FedEx Express. “This contract provides enhanced value and additional flexibility allowing the USPS to respond to possible changes. We look forward to continuing our successful business relationship with the USPS.”

6 thoughts on “FedEx signs new 7 year contract worth $10.5 billion with USPS

  1. FedEx’s plane is delayed for no apparent reason and fedx doesn’t call. We send our people and truck to get the mail and THEN find out about the plane, but WE better not be 5 minutes late getting the mail to them in the evening. We MUST follow THEIR rules as they say. No live mail on Fridays. The post office is fedexs biggest customer and they tell the us what to do. The customer is not always right!!

  2. Rigorous my ass! This is one leg of USPS poor negotiating practices. The other leg will come after another “rigorous evaluation” of our costs, so we can give away our services at the “last mile” delivery! We overpay them for their planes, they underpay us for our final delivery,and postal management thinks we can make it up with volume!! WHAT A JOKE.

  3. Please finish the rest of the story!
    It should read…..FedEx signs new 7 year contract worth $10.5 billion with USPS. In turn, the USPS will deliver FedEx’s prority mail.

  4. Letting the fox in the chicken coop again….Will upper management ever learn? Don’t the powers that be realize that when Fedex flies our product and fails the customer does not know that it was not USPS. It is difficult to explain that we hire the competition to handle our premium service and oops they didn’t get it to the destination in time. I have been told there are monetary fines that Fedex pays to USPS but what loss do they feel for the reputation failure? ZERO!

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