(Reuters) -United Parcel Service said on Monday it will become the United States Postal Service’s (USPS) primary air cargo provider, as rival FedEx announced an end to its more than 20-year partnership with the postal service provider.
USPS was the largest customer for FedEx’s air-based Express segment, even as payments declined after the postal service shifted letters and packages from planes to more economical trucks as part of an operational revamp.
“It’s not a huge loss for FedEx, but it will impact their density… You’re losing consistency in terms of revenue from a pretty significant partner, but it wasn’t the most profitable business for them … it’s not all negative,” said Faisal Hersi, an equity analyst at Edward Jones.
USPS represented just about 4% of Express’ annual revenue, according to a Reuters calculation.
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