Summary
FedEx Corporation, through its subsidiary Federal Express Corporation, announced on April 23, 2013, a significant new seven-year transportation agreement with the United States Postal Service (USPS). This agreement, effective October 1, 2013, through September 30, 2020, will see FedEx Express providing domestic air transportation services for Priority and Express Mail. The deal is projected to generate approximately $10.5 billion in revenue for FedEx Express over its lifespan, representing a substantial and long-term revenue stream. This filing is important for investors as it confirms the continuation of a critical customer relationship and provides a clear outlook for a significant portion of FedEx's future business.
Key Highlights
- 1FedEx Express has secured a new seven-year transportation agreement with the USPS.
- 2The agreement covers domestic air transportation services for Priority and Express Mail.
- 3It commences on October 1, 2013, and will run until September 30, 2020.
- 4The new contract is expected to generate approximately $10.5 billion in revenue for FedEx Express over its term.
- 5This agreement replaces the existing transportation agreement which was set to expire.
- 6The filing confirms a material definitive agreement has been entered into.
Frequently Asked Questions
This 8-K filing announces the entry into a material definitive agreement by FedEx Corporation's subsidiary, Federal Express Corporation, with the United States Postal Service (USPS) for transportation services.
The agreement is projected to generate approximately $10.5 billion in revenue for FedEx Express over its seven-year term, providing a significant and predictable revenue stream.
The new transportation agreement begins on October 1, 2013, and will remain in effect until September 30, 2020.
FedEx Express will provide domestic air transportation services for the USPS's Priority Mail and Express Mail.