Fri. Mar 1st, 2024

FedEx Express revamp hangs on fate of USPS, pilot talk

January 18, 2024

READ FULL ARTICLE AT » https://finance.yahoo.com

LOS ANGELES (Reuters) – FedEx Corp is waging financial battles on two fronts.

The delivery giant wants a more profitable contract with the U.S. Postal Service and is seeking an elusive labor deal with its pilots. How both efforts shake out will be key to improving profit at its largest business, overnight-delivery provider FedEx Express.

FedEx is the No. 1 USPS domestic air contractor, supplying the speed for the agency’s Priority Mail and other quick services under a contract that will expire on Sept. 29.

USPS payments to FedEx reached $2.4 billion during the postal service’s fiscal year ended September 2020. That shrank to $1.7 billion in fiscal 2023 after the postal service shifted letters and packages from planes to trucks. The switch appears to be starving the daytime air operation that FedEx created for USPS of the volume it needs to keep planes about 70% full and generating profit.

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