(November 13, 2014) USPS awarded UPS Worldwide Forwarding, Inc., a subsidiary of United Parcel Service (UPS), a four-year contract for air transportation services, both within and outside the continental United States..
UPS will perform air transportation and terminal handling services in support of a nationwide air transportation network. The estimated value of the base period of the contract is $365,000,000. The actual value of the contract will fluctuate depending on mail volume and mail class mix.
In 2006, USPS awarded UPS a three-year contract (which included an option for one two-year extension) to provide domestic air transportation of primarily First Class and Priority Mail between cities.
The 2006 agreement expanded upon an existing relationship between UPS and USPS with an increase in the number of cities that the company provided air transportation from 16 to 98.
In 2010, USPS awarded UPS Worldwide Forwarding, Inc. a 4-year contract worth $280 million. It is not clear why the monetary amount of 2014 contract increased by $85 million since mail volume has decreased.
Additionally, UPS is a chief competitor of USPS as well as one of the Top 10 suppliers each year.
As a side note.. UPS sued USPS some years ago (UPS WORLDWIDE FORWARDING, INC., PETITIONER v. UNITED STATES POSTAL SERVICE) surrounding ‘International Customized”- Mail’ service (ICM), a program under which the Postal Service negotiates volume-based rates with large- scale users of international mail. The case went all the way up the U.S. Supreme Court. In the real world –conventional wisdom dictates that businesses/companies normally will not bite the hand that feeds them. But in the case of the “frenemies” USPS, UPS and FedEx this rules does not apply.
USPS has been under increased pressure over the years to operate more like a business. But how many Fortune 500 companies (or businesses in general) enter into contracts which provides their chief ‘competitors’ millions/billions of dollars each year?? In addition on top of providing money– how many companies continue a working relationship with another company after getting sued over and over again? This question is asked over and over again with no clear-cut answer.
good news for me……..as a hedge against the corrupt, incompetent, good old boy/girl po mismanagement I started accumulationing shares of UPS & FDX in 1995.(bought first 2 shares of stock with help of Father who worked at ATT-currently own 70 stocks-I made my own social security/retirement fund as well as fully funding TSP -apple just split 7 for one, forth split since 2000) UPS $108.00 a share FDX $171.00 a share. all I can really say usps is keep up the good work growing UPS & FDX lol. with 15 years at Pan American Airlines before the PO I know all about transportation lift capability , logistics, and the revenue it earns. ps….what ever happened to those 3 old po 727 freight clunkers the po used to show on tv lol?