FedEx Has Mail.(the service contract between FedEx Express and the U.S. Postal Service)(Brief Article)

9-week ramp-up prepared postal service, FedEx for launch of pre-sorted mail pact

An Aug. 27 the service contract between FedEx Express and the U.S. Postal Service for the delivery of express, priority and first class mail took effect. "In simple terms, we [started] carrying 3.5 million pounds of mail for the Post Office every day," said Trish Harwood, manager of international public relations for FedEx.

Under the agreement, announced in January, FedEx is providing nearly 3.5 million pounds of air capacity each day -- the equivalent of 30 widebody DC-10 aircraft -- to carry pre-sorted mail. The mail is tendered to FedEx in sacks, tubs or containers and shipped to FedEx facilities at airports around the nation, then tendered back to the USPS. The seven-year air transportation pact and an agreement that lets FedEx put drop-boxes outside post offices are expected to generate dose to $7 billion for FedEx.

To deliver at full capacity from day one of the agreement, the USPS and FedEx underwent a joint, nine-week ramp-up to incorporate their systems. "We really thought that one out in advance," said Paul Vogel, vice president of network operations for the U.S. Postal Service. "This is a merging together of two significant sized networks."

During the first week of the ramp-up, on June 25, the USPS began testing its Surface Air Management network, which replaced an antiquated 15-year old system. Vogel said that SAM was supposed to be finalized in November 2001, but the FedEx deal inspired the USPS to move up its timeline.