The United States Postal Service (USPS) awarded the United Parcel Service, Inc. (NYSE:UPS) an air cargo services contract under which UPS will provide air transportation services to USPS. The letter contract, which was issued on April 1, 2024, calls for a five-and-a-half -year minimum base term. Implementation of the new contract is scheduled to begin on Sept. 30, 2024.
The Postal Service’s decade-old contracts for air cargo services will expire later this year. Our requirements were reevaluated in light of the dramatic changes in the mailing and shipping marketplace that have occurred since our 10-year Delivering for America plan was initiated in March 2021.
A core strategy of the Postal Service’s Delivering for America plan is to optimize and improve the efficiency of both national and local transportation. Our objective in this area is to reduce our overall transportation cost by $3 billion over the next two years, including $1 billion in airfreight cost savings already achieved. Finalizing this agreement is a key step toward achieving our operational and financial sustainability goals.
