USPS makes a deal with FedEx worth $10.5 billion
Direct mail marketers using address verification software might want to know that the U.S. Postal Service recently renewed a contract with the FedEx to utilize their domestic air transportation services.
According to USPS, the seven-year deal with FedEx will allow mail to be sent between domestic airports. The contract is estimated to be worth $10.5 billion and will begin in October when their previous agreement ends. However, the new deal almost did not go through, as the UPS attempted to supplant FedEx's bid after the present contract expired.
Bloomberg reports UPS challenged the renewal of the USPS contract with FedEx, but FedEx decided on USPS for financial reasons. The deal is a much needed boost for USPS, which has attempted to create a plan that decreases its budget while keeping up with the large volume of mail. Although USPS will continue to invest in the competitor, the new measure reduces the amount of business lost to UPS and provided what USPS believes is the best value.
The contract will also help with labor costs, as FedEx has the workforce and assets to incorporate USPS mailing volume.