UPS Secures Major Contract as New Primary Air Cargo Provider for USPS

Replacing FedEx, UPS's new agreement aims to significantly reduce transportation costs for the U.S. Postal Service.

UPS has been awarded a significant contract to become the primary air cargo provider for the U.S. Postal Service, replacing FedEx after more than 20 years.
The contract between UPS and USPS is set to start on Sept. 30, with a minimum term of five-and-a-half years, aiming to reduce USPS's transportation costs by about $3 billion over two years.
FedEx's decision to not renew its contract with USPS came after negotiations failed to reach mutually beneficial terms, with the current contract expiring on Sept. 29.
FedEx plans to adjust its network to drive efficiencies and improve profitability in fiscal year 2025 and beyond, following the contract's end.
Shares of UPS rose following the announcement, while FedEx shares declined, reflecting the market's reaction to the new agreement.