Postal Service’s FedEx Contract Investigated

The U.S. Postal Service faces two investigations of its $6.3-billion contract with shipper FedEx Corp., but the national mail carrier said it was confident the deal will move forward to benefit consumers. A coalition of rival air cargo carriers, including Emery Worldwide, a unit of CNF Inc., last week urged an investigation of the pact between the postal service and FedEx as anti-competitive and could lead to inferior service and higher prices. A Justice Department spokeswoman said an investigation of possible antitrust concerns over the contract was underway. Meanwhile the postal service’s independent investigative arm, the Office of the Inspector General, has told the service it is reviewing the FedEx contract. The nonexclusive contract between FedEx and the post office is set to begin in late August and the postal service expects to save $1 billion over seven years compared with previous contracts. The air cargo coalition, however, estimates the FedEx deal will add $433 million to $1.17 billion to the postal service’s costs.