UPS-USPS deal

Amy Scott Jun 28, 2006

TEXT OF STORY

SCOTT JAGOW: UPS and the Postal Service have a pretty fierce rivalry, as you can imagine,from who can get your package there first to who has the most unattractive uniforms. But today, team UPS and team Postal Service are set to announce a deal to work together. UPS will start carrying US mail on its planes as soon as this weekend. Marketplace’s Amy Scott has more.


AMY SCOTT: The deal is expected to add $100 million a year to UPS’s revenue, according to the Journal.

That’s far short of the partnership the post office has with FedEx. That contract’s worth $1.3 billion a year.

But shipping consultant Satish Jindel says it’s not the dollar amount that matters. He says in the past UPS has fought the Postal Service, only to watch its rival FedEx profit.

SATISH JINDEL: “The more important significance of this is the change in the relationship between the two organizations. And it’s not just between the two. What you want to look for here is this is actually a change in the way the post office is working with all private carriers.”

The deals mean less business for the passenger airlines, which have historically transported the bulk of US mail.

Jindel says the private carriers like FedEx and UPS offer more efficient services that could eventually bring prices down.

In New York, I’m Amy Scott for Marketplace.

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