USPS has awarded FedEx a 7-year air cargo network contract to provide domestic air transportation services for Priority and Express Mail.

The current agreement with FedEx ends in September 2013. The new contract will take effect in October and continues the Postal Service’s successful business relationship with FedEx.

USPS conducted a competitive procurement for the transportation of domestic mail products by air, incorporating new service performance requirements and improved contract terms and conditions.

Following an evaluation of technical aspects, pricing, and other factors in the proposals it received, USPS concluded that the FedEx proposal represented the best value for the Postal Service. The new contract benefits USPS customers by providing service improvements, capacity flexibility and other planned operational improvements.

Based on estimated volumes, the new agreement is valued at approximately $10.5 billion over the 7-year term.