USPS Signs New Contracts With Airlines

The U.S Postal Service has signed five-year air cargo service agreements with seven airlines that will take effect on Sept. 30.The carriers that will participate in the contract are Dallas-based American Airlines Inc.; Houston-based Continental Airlines Inc.; Tempe, AZ-based US Airways Inc.; Forest Hills, NY-based JetBlue Airways; Oak Creek, WI-based Midwest Airlines; Indianapolis-based ATA Airlines Inc.; and Mendota Heights, MN-based Sun Country Airlines.

The value of the contract for the seven airlines is approximately $225 million for USPS's 2007 fiscal year, which begins Oct. 1, according to the US. Postal Service. The carriers will move First-Class Mail, Express Mail, some Priority Mail The previous contract with the USPS, executed in 2003, narrowed the number of carriers from 50 to 13 and instituted stringent requirements for the on-time delivery of mail by contracted carriers. The requirements were designed to increase efficiency and improve service.

For example, the airlines are now required to scan mail at four key points.

By tracking the mail this way, the agency said, it can assure its customers that their mail is being transported by top performing carriers and that the mail can be tracked.

Failure to meet strict on-time performance standards for any route, as validated by the scanning requirement, could result in the airline losing business to competing airlines.