he Untied States Postal Service has a newly signed 7 year contract with FedEx that authorizes mail that could be sent in cheaper airlines onto FedEx jets. During internal auditing it was found that USPS spent nearly $94 million in unnecessary expenses, and still losing money.
Due to USPS lack of diligence, they entrusted FedEx to sort their mail while incurring sorting charges and other fees. USPS says in 10 years they will save $112.7 million and $482.9 million can be put towards other causes.
In addition to this change, there will be a rate increase on their competitive products, such as: express mail, regular mail and priority mail sometime in January 2011. The argument is the increase in money being wasted on FedEx jets, when highway and railroad transportation for surface mail is available. The policy for USPS mail states first class mail is assigned to surface transport, and if FedEx contract is met they should go to passenger airlines. If they aren't available they should go on FedEx planes.
In this case, the mail is sent straight to the jet. However, USPS requires a minimum amount of mail. If not met, they must pay FedEx for the unused capacity.
So is there not enough mail surfacing to cover the minimum requirements, obligating the postal service to send all mail through FedEx or is USPS making their job easier?
As for the expenses, this could be avoided if the postal service sorts their own mail and the time that is given to the contractors to deliver the mail is extended or better yet adjusted.
Is USPS mismanaging their money or abusing their contract with FedEx?
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