This week, UPS announced that they have won a major air contract to become the primary cargo provider to the United States Postal Service.
It is understood that the deal has begun already, with the cargo carrier marking it as “effective immediately”.
Without further ado, let’s get into it…
The Full Statement from UPS on USPS…
The full statement from UPS on the accrual of the contract with the United States Postal Service is as follows:
“UPS today announced the company has been awarded a significant air cargo contract by the United States Postal Service (USPS).”
“This award is effective immediately and greatly expands the existing relationship between the two organizations.”
“Following a transition period, UPS will become the USPS’s primary air cargo provider and move the majority of USPS air cargo in the US.”
Adding to the statement was the CEO Carol Tome:
“Together UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable and efficient integrated network,”
What Does This Mean for the Carrier?
This is a major deal for UPS, as the United States Postal Service delivers parcels all around the U.S.
It effectively means that the carrier will be transporting goods all over the U.S.
Statistics from 2021 shows that USPS delivered 128.8 billion pieces of mail per year, which is a lucrative opportunity for the air cargo carrier.
So that means they can expand beyond on their $91bn of revenue recorded in 2023.
Overall…
In conclusion, this deal between UPS and the United States Postal Service is a major one.
Looking ahead, all eyes will be on when the transition period is completed.
From here, this is a major lifeline for a cargo carrier like UPS, who have recorded lower volumes of cargo post-pandemic.
But for now, all eyes will be on how this revolutionary deal will perform.
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