Court Ruling Favors USPS-FedEx Deal

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The U.S. Court of Federal Claims this week denied Emery Worldwide Services' challenge to the U.S. Postal Service's air transportation contract with Federal Express.

The USPS and FedEx entered an agreement in January for FedEx to transport the USPS' Express Mail, Priority Mail and First-Class mail. The agreement is scheduled for implementation in late August.

Emery, a unit of trucking company CNF Inc., Palo Alto, CA, had complained that the USPS did not open the contract to public bid. Emery carries Express Mail for the USPS under a separate, 10-year pact that ends in 2004.

The decision allows the USPS-FedEx agreement to proceed. However, all parties have until March 28 to respond to the judge's decision.

"We continue to believe that awarding the contract without competition was illegal," said James Allen, vice president at CNF Inc.

The USPS, however, said it has "consistently maintained that it had conducted a thorough business and legal analysis before awarding the contract."

FedEx said it was pleased with the court's ruling and is looking forward to the full implementation of the USPS-FedEx alliance.

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