Following extensive discussions, FedEx Corporation has announced the agreement between FedEx Express and United States Postal Service (USPS) for domestic transportation services will expire by its terms on September 29, 2024.
FedEx and the USPS have had a long and productive relationship for more than 20 years. Over time, their respective strategies have shifted as they have transformed their networks and operations for the future.
USPS serves as a key provider for international shipping and mailing services between the US and Australia. Australia Post relies on the USPS for the delivery of mail and packages sent from the United States to Australia, and vice versa. The USPS acts as an important link in the global postal network, facilitating the exchange of mail between the two countries.
“Together UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable and efficient integrated network,” says UPS Chief Executive Officer Carol B. Tomé.
FedEx has long said it would extend the contract with the USPS if USPS could agree to commercial terms in the best interests of FedEx shareholders. Although the companies were unable to reach mutually agreeable terms, they say they will remain committed to delivering outstanding service through the completion of their contract in September.
Upon the conclusion of the contract, FedEx will implement adjustments to its network that will drive efficiencies and create more flexibility. The elimination of structural costs currently in place to support postal service volume will be addressed and, in conjunction with its DRIVE efforts, FedEx profitability will improve in FY25 and beyond.
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