Postmaster defends proposed FedEx alliance

As members of a House subcommittee voiced antitrust concerns about a proposed alliance between the U.S. Postal Service and Federal Express at a hearing Tuesday, Postmaster General William Henderson defended the idea.

"There's no exclusivity in this," Henderson told the House Government Reform Postal Service Subcommittee. "Anyone who wants to come to the table and talk can come to the table."

The proposed deal has drawn criticism from United Parcel Service, which competes with the Postal Service and FedEx. UPS has accused the Postal Service of using its "$40 billion government-granted monopoly from first class mail ... to compete unfairly in the marketplace."

Rep. Henry Hyde, R-Ill., has asked the Department of Justice to launch an investigation to verify that antitrust laws would not be violated by a USPS-FedEx partnership.

On Tuesday, Henderson told subcommittee members that discussions about partnering with FedEx began some time ago, but lay dormant until the shipping and delivery company decided to revisit the idea.

"We're happy to talk to UPS," Henderson testified. "The phone is silent, though."

"We can't get them to go on a date, more or less marry them," Henderson continued, drawing chuckles from subcommittee members.

Henderson provided details of the proposed alliance, which include the Postal Service carrying some of FedEx's residential ground deliveries in rural areas while FedEx handles distribution of some Postal Service Express Mail packages.

"The cornerstone of our discussions revolves around using FedEx's air transportation network, which is the finest and most extensive in this country," Henderson explained. "We did talk to FedEx about the possibility of selling retail, allowing postal operations to sell FedEx products."

Rep. Steven LaTourette, R-Ohio, questioned Henderson about the possibility of FedEx delivery boxes standing in post office lobbies. "The devil is in the details," Henderson said. "How much money can we make off it?"

Saying that USPS expects to lose $100 million to $200 million in net revenue this fiscal year, Henderson stressed that changes must happen if the Postal Service is to survive.

"It's going to be very hard to break even next year; right now it's dim from my point of view," Henderson said. "We're going to have to raise prices or cut to the quick."

Another issue affecting postal operation revenues and making a USPS-FedEx partnership more attractive to postal officials is the potential for change in daily mail delivery service in rural areas. USPS has been traditionally lost money in rural areas and is looking at ways to stop the trend.

"In general terms, urban areas are subsidizing rural areas," said Rep. John McHugh, R-N.Y. "If we allow this to continue, there are going to have to be made some particularly painful decisions, and they are going to affect rural areas."

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.