State regulators agreed to let UPS expand in Texas.

United Parcel Service will deliver packages between Texas cities for the first time, but a court challenge was expected from a group of Texas delivery companies. The order, signed by two of the three members of the Texas Railroad Commission, said UPS had "proved that the services of existing carriers were inadequate." UPS long has been allowed to make shipments to and from other states and Texas, as well as some deliveries within cities. But a 1931 state law that said package deliverers should operate on scheduled and regular routes had been used to bar UPS from intercity service. UPS' application was challenged by Tex-Pack Express, a group of Texas companies. Atty. Joe Kilgore of Austin, Tex., representing UPS, said he expects Tex-Pack to take the case back to court.

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