FedEx is still the king of cargo airlines, while rival UPS dropped a notch, according to a new report from the International Air Transport Association.
FedEx’s place at the top could be challenged in the coming years if the U.S. Postal Service ends its express air transportation contract with the company, commented former FedEx employee Dean Maciuba of Logistics Trends & Insights. The agreement is set to expire in 2024.
FedEx announced a contract extension with the USPS in 2017, which is expected to generate about $1.5 billion in annual revenue for FedEx Express.
Their relationship has changed of late. FedEx is shifting volume that used to go to the USPS for the last leg of delivery back into its own network and “aggressively competing” with the USPS’ Priority Mail service, Maciuba said. This gives the USPS “two very good reasons” to shop the agreement with UPS or Amazon Air, he added.