UPS to become the primary air cargo provider for the United States Postal Service

UPS will become the primary air cargo provider for the United States Postal Service.

The Atlanta shipping company said Monday that it had received an air cargo contract from the U.S. Postal Service that significantly expands an existing partnership between the two.

UPS will move the majority of air cargo in the U.S. for the postal service following a transition period, according to UPS.

Financial terms of the deal were not disclosed.

USPS's current air cargo contract with FedEx is set to expire in late September. During the company's third-quarter conference call last month, FedEx Chief Customer Officer Brie Carere said that FedEx had provided its services to USPS for more than two decades and that the two sides were still in negotiations.

USPS announced a four year extension of its air cargo network contract with FedEx in 2020. The mail and delivery service said that the contract provided for domestic air transportation for U.S. Mail, Priority Mail and Priority Mail Express.

Air cargo shipments have been rising. Last month the International Air Transport Association said that total demand for air cargo, which is measured in cargo ton-kilometers, climbed 18.4% in January compared with the prior-year period. That's the highest annual growth in the figure since the summer of 2021.