The USPS Office of Inspector General suggested the agency consider if a new deal is the best path forward as it struggles to meet minimum volume requirements.
The U.S. Postal Service is transporting more First-Class Mail and Marketing Mail via air to satisfy its air cargo contract with UPS and avoid higher rates, according to a July 1 report from the agency’s Office of Inspector General.
As part of its contract with UPS, which became the agency’s primary air transportation provider in 2024, the USPS guarantees a minimum daily average volume, with increased rates applying if volumes are a certain percentage above or below the negotiated amount.
The exact percentage was redacted in the report, which did not name UPS directly. However, it focused on the Postal Service’s primary air cargo contract that began on Sept. 30, 2024, which aligns with the characteristics of the UPS agreement. The deal is valued at more than $10 billion and is effective through March 2030, according to the OIG.
How ironic that the USPS has to use marketing mail to fulfill the contract minimum. Flying is quicker, then they turn around and delay it to cut overtime and make their bonuses.