Fuel Smarts

Airfreight Carriers Oppose USPS/FedEx Pact

April 03, 2001

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During a House Government Reform Committee hearing on Postal Service performance this week, executives of three airfreight carriers joined forces against an agreement between the U.S. Postal Service and Federal Express.

Jerry Trimarco, CEO of Emery Worldwide Airlines; Delford Smith, CEO of Evergreen International Aviation; and Ron Ryan, CEO of Ryan International Airlines, made a joint statement about the deal, announced in January, which provided FedEx air transport for certain postal services and allowed FedEx to put drop boxes at post offices.
"Mail users, taxpayers and our companies will pay a high price for the fatally flawed contract between the Postal Service and FedEx," said the statement from FedEx's competitors. "In scrapping the present system - which distributed responsibility among several carriers - USPS will incur higher costs. Service standards will decline. The public interest will be at serious risk because if a single company's hub is crippled - by a strike, a natural disaster, or other unanticipated event - paralysis will occur."
Those who oppose the deal argue that instead of cutting costs, it will add between $433 million and $1.17 billion to USPS' expenses over the contract's life.
Other companies have joined the airfreight carriers in an appeal to the Justice Department to open a formal inquiry into the antitrust aspects of the transaction.

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