USPS and FedEx Corp. Install Fedex Delivery Boxes Nationwide

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The U.S. Postal Service and FedEx Express, a subsidiary of FedEx Corp., began a nationwide blitz yesterday to install about 10,000 FedEx delivery boxes outside post offices in major U.S. markets.

More than 700 self-service drop boxes will be installed beginning this week in metropolitan areas of Washington, Chicago, Philadelphia and Trenton, NJ. By the end of July, an estimated 3,000 FedEx drop boxes will be installed outside post offices in 38 metropolitan areas. During August and September, deployment will extend to at least 70 additional markets, with plans for further expansion through mid-November.

The self-service boxes are part of a business alliance announced in January between the USPS and FedEx. The alliance includes an agreement that allows FedEx to place drop boxes outside post offices as well as a shared air transportation network.

The USPS and FedEx began to test-market the self-service drop boxes in Charlotte, NC, and Fort Lauderdale, FL, in March for a total of 113 drop boxes.

After research and site selection, FedEx has targeted post offices convenient to customers in both downtown and suburban locations. The FedEx drop boxes will provide self-service locations for express services, including FedEx First Overnight, FedEx Priority Overnight, FedEx Standard Overnight and FedEx International Priority.

Postal service retail associates will not handle or accept FedEx products. FedEx employees will service and maintain the drop boxes.

David J. Bronczek, president/CEO of FedEx Express, said, "Customers in our test markets have responded enthusiastically to the new FedEx drop box options in their neighborhoods, and we look forward to extending this convenience and flexibility to FedEx Express customers throughout the country."

FedEx will pay the USPS $126 million to $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.

The USPS said 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.

As they install the self-service boxes, the USPS and FedEx also will begin operational testing on Monday of the shared air transportation network at several major airports. National implementation of the network will begin Aug. 27.

The air transportation deal gives the USPS 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.

The USPS expects to save about $1 billion in air transportation costs and more than double the market reach of its Express Mail next-day and Priority two-day services.

The seven-year agreements are expected to generate about $1 billion a year for FedEx.

During the operational testing period, the USPS' Surface-Air Management System will be used to identify mail that will fly on the FedEx air transportation network, including First-Class, Priority and Express mail.

The system gives the USPS the ability to assign a unique dispatch and routing tag to each tray, sack or container, replacing the Air Contract Data Collection System 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. In addition, the system can track manifests online.

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