LOS ANGELES, April 23 (Reuters) – United Parcel Service expects its newly won U.S. Postal Service (USPS) air cargo contract to be profitable in its first year and throughout the more than five-year deal, after rival FedEx struggled with the business, Chief Executive Carol Tome said on Tuesday.
Atlanta-based UPS will become the No. 1 USPS air cargo service provider on Sept. 30. It replaces FedEx, which was paid $1.75 billion in fiscal 2023 to provide Priority Mail and other speedy air services for the quasi-governmental agency.
FedEx held the contract for more than two decades, but recently struggled to squeeze out profits after the postal service shifted volume from planes to trucks in a bid to slash costs.
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Carol Tomé said the carrier offers “an integrated solution that’s very different” from what FedEx can provide.
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