U is for USPS and V is for Victory – UPS to ‘Fly’ High This Winter

The United States Postal Service (USPS) announced earlier this month about plans to transition its daily air cargo volumes to UPS. The decision precedes a major change in USPS’ delivery network – the termination of a two-decade partnership with FedEx in September 2024.

On the other hand, its brand-new partnership with UPS hails an exciting time for the latter and aims to ensure uninterrupted service for customers, particularly during the bustling holiday season. The transition, outlined in detail during recent briefings, underscores UPS’s integrated network prowess and its commitment to fortify its B2B portfolio.

Leveraging its integrated air-and-ground network, UPS is poised to better accommodate USPS’s first-class mail, Priority Mail, and Priority Express volume, thereby cementing its position as the integrated express carrier of choice. UPS’ capacity and capability will also come in handy to the USPS considering that their contract with FedEx ends just around the corner for the holiday season. Having UPS to support air cargo operations for time-efficient outreach to customers is anticipated to greatly benefit USPS.

With a projected annual revenue of USD 1.5 billion, the USPS contract is set to bolster UPS’s top-line growth, aligning seamlessly with its strategic objectives.

The seamless integration of USPS cargo volume into UPS’s existing network is expected to yield operational and consolidated margin improvements. UPS plans on capitalizing on its meshed network and regional gateways to optimize its resources to meet USPS’s shipping demands while mitigating unnecessary costs. While the transition to UPS may raise some skepticism regarding profitability, industry analysts remain optimistic about the long-term benefits of this strategic partnership.

As UPS gears up for the upcoming holiday season, its partnership with USPS heralds a new era of collaboration in the logistics landscape. By seamlessly integrating USPS cargo volume into its network, UPS is poised to enhance operational efficiency and deliver unparalleled service to its customers. As industry dynamics continue to evolve, UPS remains at the forefront of innovation, driving growth and value creation in the global logistics ecosystem.

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