FedEx's stock dips and UPS flat as USPS makes changes to its air cargo business

By Ciara Linnane

FedEx says its contract with USPS will end in Sept. after parties could not agree terms

FedEx Corp.'s stock fell 1.7% on Monday, after the parcel-delivery company said its contract with the U.S. Postal Service, USPS, will expire on Sept. 29, after the two entities failed to agree to terms to extend it.

"The parties were unable to reach agreement on mutually beneficial terms to extend the contract, and negotiations concluded on March 29, 2024, following extensive discussions," FedEx (FDX) said in a regulatory filing.

The company will continue to provide air transportation services domestically and to Puerto Rico through the end of the contract.

The news came hours after rival United Parcel Service Inc. said it has won a "significant" air cargo contract from the USPS, in a deal that's effective immediately. The award "greatly expands the existing relationship between the two organizations," and UPS will eventually become the Postal Service's primary air-cargo provider.

UPS did not provide financial terms or other details. Its stock (UPS) shed early gains to trade down 0.5%, but has fallen 24% in the last 12 months, while the S&P 500 SPX has gained 28%.

-Ciara Linnane

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04-01-24 1003ET

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