FedEx Extends Deal With US Postal Service for $10.5 Billion
FedEx struck a $10.5 billion deal with the U.S. Postal Service on Tuesday to continue providing domestic air transportation service for Priority and Express Mail.
FedEx shares ticked higher in after-hours trading following the news. (Click here for the latest after-hours quote.)
The shipping giant was thought to be at risk of losing the lucrative contract, possibly to rival UPS, when it expires in September.
The new contract extends the airport-to-airport cargo deal for seven years. The Postal Service said FedEx faced a competitive process to keep the contract.
"FedEx Express will continue the outstanding service that we have provided to the USPS for the past 12 years under this new agreement," said David J. Bronczek, president and chief executive officer of FedEx Express.