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Postal Service Announces National Roll-Out of FedEx Drop Boxes at Post Offices

Wednesday, June 20, 2001

Press release from the issuing company

WASHINGTON, DC — Beginning today, self-service Fed Ex Drop Boxes will be installed at post offices nationwide, implementing the first of two agreements between the Postal Service and FedEx Express. On January 10, the Postal Service and FedEx Express formed a business alliance leveraging their two networks–-the coast-to-coast retail presence of the Postal Service and the extensive reliability of the FedEx Express air transportation network. The retail agreement gives FedEx the opportunity to place thousands of its self-service drop boxes outside post offices. The air transportation agreement provides the Postal Service with shared access to the FedEx Express air transportation network for airport-to-airport delivery of its expedited products–Express Mail and Priority Mail–as well as First-Class Mail. "These agreements focus on our core business–-universal access to mail services, at the best value possible for the American people. Ultimately this business alliance will strengthen the Postal Service, help it manage its costs, grow revenue and improve services," said Patricia M. Gibert, Postal Service Vice President of Retail, Consumers and Small Business. The Postal Service expects to save about $1 billion in its air transportation costs and more than double the market reach of its Express Mail next-day, and Priority two-day services. FedEx Express has available capacity during the day that meets postal requirements and a scope of operations that allows the Postal Service to expand its service coverage. The seven-year contract also has guarantees by FedEx Express to ensure on time performance with the network. FedEx will pay the Postal Service between $126 and $232 million in new revenue, depending on the number of self-service drop boxes that are placed outside post offices over the seven-year contract period. In March, the Postal Service and FedEx began test market deployment of the self-service drop boxes in Charlotte, North Carolina, and Ft. Lauderdale, Florida, for a total of 113-drop boxes. National deployment will initially extend placement of drop boxes to an additional 38 markets, for an estimated 3,000-drop boxes, by the end of July. During August and September, deployment will extend to at least 70 additional markets, with plans for further expansion through mid-November. Other qualified overnight package delivery companies have the opportunity to place collection boxes at post offices on terms similar to those in the agreement with FedEx Express. Under the terms of the agreement, Postal Service retail associates will not handle or accept FedEx products. FedEx employees provide both the service and maintenance of the drop boxes. On June 25, the Postal Service and FedEx will begin operational testing of the shared air transportation network in several cities. During this period, one of the cornerstones of the Postal Service's information platform–the Surface-Air Management System (SAMS)–will be used to identify mail that will fly on the FedEx air transportation network, including First-Class Mail, Priority Mail and Express Mail. SAMS gives the Postal Service the ability to assign a unique dispatch and routing tag to each tray, sack, or container, replacing the Air Contract Data Collection System (ACDS) with upgrade-ready software. It also has the ability to assign surface routes, and manage the capacity of the first leg of transportation by splitting out mail by class and to track manifests online. National implementation of the shared transportation network will begin August 27.

 

 

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