UPS to become US Postal Service's primary air cargo provider

UPS will become the primary air cargo provider for the United States Postal Service (USPS) after signing an expansive new contract, UPS announced Monday.

(The Hill) -- UPS will become the primary air cargo provider for the United States Postal Service (USPS) after signing an expansive new contract, UPS announced Monday.

The carrier will move the majority of USPS air cargo in the United States following a transition period.

“Together UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable and efficient integrated network,” UPS CEO Carol Tomé said in a press release.

The details of the contract were not disclosed.

News of the contract comes after USPS negotiations with FedEx Express ended on March 29, after both parties “were unable to reach agreement on mutually beneficial terms to extend the contract,” according to the FedEx SEC filing.

FedEx will provide domestic transportation services by air, and including Puerto Rico, for USPS through Sept. 29, when its contract expires.

In the SEC filing, FedEx said USPS’s plan for “strategic changes to its operations to reduce its reliance on the air network of FedEx Express” would have adverse effects on the company’s operations and financial condition.