FedEx: FedEx and the USPS Won't Renew Airlift Contract; UPS Wins a Portion

FedEx announced that after a period of "extensive discussions," it will not renew its contract with the United States Postal Service, or USPS, which will expire on Sept. 29. Recall that for roughly the past 20 years, FedEx express has provided airlift transportation for several USPS products within the US, including first class mail and priority mail express. Overall, this does not come as a surprise given management's commentary in recent quarters, which (as we heard it) seemed to hint that material service and pricing changes were necessary in order for a deal to be mutually beneficial and work effectively.