The Postal Service's transition of its air cargo operations from FedEx to UPS results in cost savings.

The U.S. Postal Service (USPS) has shifted its primary air transportation from FedEx to UPS, resulting in a 43% reduction in air transportation costs for Q1 of fiscal year 2025. The new UPS contract, valued at approximately $10 billion, offers more favorable terms, including lower volume commitments and stricter on-time requirements. While 85% of USPS's air volume is now with UPS, challenges remain, such as mishandling hazardous materials. The USPS is also focusing on reducing overall air transportation, aiming to increase ground transport to cut costs.