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Fedex International Mail Contract

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BTW... how long is the USPS - FedEx contract good for. When it expires, will it be re-bid by other companies, namely: Airborne, UPS, DHL, etc... or is there a guarantee for FedEx to keep this conract.

I'm just curious if 5 years from now the contract is given to someone else... what does that mean for FedEx. Maybe some FedEx guys here know the percentage of cargo the USPS contract provides and answers to my other questions.

Thanks,
Mike
:)
 
There was never a bid put out on the FedEx USPS contract. The post office just gave it to them. Yes, I'll say it again, the post office GAVE FEDEX A 7 YEAR 6.3 BILLION $ CONTRACT. NO BID. The former Post Master General is now on the Board at FedEx.
 
Good Question

When Fed Ex was awarded the USPS contract, there was still several years left on the existing contract (with Emery and their subcontractors: Express One, Ryan, Kittyhawk). I don't know exactly how it will work out for Fed Ex, but I do know that there are a bunch of guys (my ex-coworkers) on the street because of this NEW contract.
 
As mentioned previously the contract is for 7 years. This means it will expire in 2008. However, the view from the top is that the Post Office will continue the contract after it expires based on the service they get and the money they are saving.

With regards to the fact there was no bid. IMHO the Post Office was looking to consolidate its mail carrying to one main air carrier with an extensive network and the capability to carry alot of freight. Really the only two US carriers that fit this requirement are UPS and FedEx. After the contract was annouced, there was a lot of hoopla from different voices, but one remained amazingly silent-- UPS. Buzz is they were offered the contract first, and TURNED IT DOWN! because they thought it would compete with their own service.
 
Actually, FedEx has about double the total lift capacity of UPS, so it is questionable that UPS could even fly the full contract. In fact, I'd say there is no question -- they couldn't do it.
 
RUMOR

I also heard this one the other day. Obviously just a rumor, but it was a fun one to hear. "The long range planners at FedEx say that we'll need between 7000 - 8000 total pilots by the year 2007". Probably obvious B.S., but still, I wouldn't mind that many guys here.

Since we'll probably get the contract "given to us" again in several years, we might need that many.

We'll see.
 
Well, I guess it makes sense to give it to FDX over UPS anyway to level the playing field between the largest 2 in the U.S. as far as total tons moved (not just by air). It wouldn't look that fair to give it to UPS. Still, no bid or chance for smaller companies that had the contract seems suspect if it is true that the former Post Master General is now on the FDX board. Hopefully that won't turn out to be a future corporate scandal.

I guess we'll have to wait a few more years to see if the contract is renewed. Anyone know what percentage of cargo moved by FDX is from USPS.

Those rumors of 7000+ sound good considering all the retirements I hear will happen during this decade.

:)
 
Well, this already went through the courts with people trying to find some scandal and all those attempts didn't turn up anything, so I'm not worried about any future "findings". As for the BOD, well, I personally hope the former Postmaster IS on the Board. We certainly can use his insight in running the contract.

My impression was that the contract was put out for bid, but you had to bid the whole thing, no more "patchwork" of different operators and procedures (which was adding a lot of cost). I think that FedEx was the only one in a position to bid on it, in terms of lift. UPS was offered a contract a few years back but turned it down. I don't know that they looked at it this time at all.
 
profile,
what you say sounds totally reasonable considering what I've seen and know about government contracts...I hear the current one saves the USPS $1 billion / year...good on 'em!
 

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