Proactive Investors - The US Postal Service (USPS) has selected the United Parcel Service Inc (NYSE:UPS) as its primary partner for transporting cargo by air to replace FedEx Corp (NYSE:NYSE:FDX, ETR:FDX), which has carried out this role for more than 20 years.
The USPS and FedEx had been negotiating an extension to their current contract, which expires in late September, but were unable to reach an agreement, FedEx said in a regulatory filing.
Atlanta-based UPS said Monday that, following a transition period, it will become USPS’s primary air cargo provider and will move the majority of USPS air cargo in the US.
"Together UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable and efficient integrated network," UPS CEO Carol B. Tome said in a statement.
Financial terms of the USPS-UPS contract were not disclosed.
Shares of FedEx traded down 2.9% at about $281 in the early afternoon on Monday on the news, while UPS shares were down 1.4% at about US$147.