USPS transportation costs climb as it adjusts to UPS contract needs

The agency’s transportation expenses increased year over year in Q3 as it shifted some volume to air cargo handled by UPS.

Dive Brief:

• The U.S. Postal Service’s transportation costs rose for the quarter that ended June 30 as it faced climbing fuel costs and it shifted volume to satisfy its air cargo contract with UPS, per the agency’s Q3 earnings report.
• Expenses for air transportation between facilities increased 4.7% year over year to $509 million. The Postal Service attributed the jump primarily “to shifting certain package volume from highway transportation back to air to meet our service standards and contract requirements,” plus large jet fuel cost increases.
• Highway transportation costs grew 4.1% YoY to nearly $1.6 billion due to higher average diesel fuel prices, which were partially offset by the air volume shift.

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