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US Postal Service awards UPS air cargo contract

US Postal Service awards UPS air cargo contract
US Postal Service awards UPS air cargo contract

Logistics giant UPS has been awarded an air cargo transportation contract. After a transition period, UPS will become the Postal Service’s primary air cargo provider and move most USPS air cargo in the US. 

UPS replaces FedEx, an air cargo service provider for the past two decades. 

The Postal Service says its 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 since our 10-year Delivering for America plan was initiated in March 2021.” 

Additionally, the Postal Service announced a core strategy of its Delivering for America plan to optimize and improve national and local transportation efficiency. The Postal Service aims to reduce its overall transportation cost by $3 billion over the next two years. This includes $1 billion in airfreight cost savings already achieved. 

Reliable and efficient air cargo 

UPS has been blazing a trail regarding innovation in its business in recent weeks. In February, the company announced a weekend delivery service in Canada. In another report by Locate2u, its president, Bill Seaward, said it’s important to stay on top of an ever-changing industry (supply chain). 

Now, this contract awarded by the Postal Service will allow UPS to expand its company footprint even further. 

UPS Chief Executive Officer Carol Tomé says: “Together, UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable, and efficient integrated network.” 

UPS growing its business footprint 

The logistics specialists have been on a trajectory for business growth. It acquired MNX Global Logistics (MNX), a time-critical logistics provider in October. 

At the time of the acquisition announcement, Kate Gutman, EVP and President of UPS International, Healthcare and Supply Chain Solutions, said: “Together with MNX, we will further that reliability and speed globally, especially for our UPS Healthcare customers. We continue to invest in services that bring unique value to our customers and create additional growth opportunities for UPS.”

The company didn’t stop there; it expanded its Access Point locker network in the UK, partnering with smart locker providers and opening 400 new locations where deliveries can be made. 

Parcel delivery market

In its global parcel delivery market report for 2023-2029, Maximize Market Research, a market research company, says the delivery sector has undergone various innovation stages. This is a result of the world’s expanding digitization, including the adoption of GPS and RFID technologies to track cars and goods. 

“Technological improvements, such as using digital technology with crowd-sourced delivery models, are also boosting the market’s prospects,” reads the report. 

These technologies help service providers improve their overall “operating efficiency and efficiently meet the needs of their clients.” 

The report also highlights additional factors that can drive market growth. Those are rapid urbanization, increased consumer spending power, and significant expansion.

Also Read: Adapting to shifting trade lanes: Strategies from UPS president

About the author

Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.

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