The latest data from law firm Culhane PLLC has revealed FedEx remained the top supplier for the United States Postal Service (USPS) with US$1.6bn in revenue for fiscal year 2023.
However, it is likely FedEx will lose this position for the first time in 20 years to UPS in FY 2025 as it takes over the agency’s primary air network in October this year. FedEx’s total revenue was US$300m less than the previous year, and US$536m less than the year before, suggesting USPS is making good on its promise to shift more mail from air to surface transportation, according to Culhane.
Increased transportation spending
USPS’s spending on goods, services and facilities in FY 2023 increased by US$3bn year-on-year to US$21.4bn with transportation-related contractors dominating seven of the 10 top spots in Culhane’s listing.
Transportation was the agency’s biggest spend category at US$9.7bn, with $6.6bn spent on highway transportation (up by almost US$500m year on year) and US$3.1bn for air transportation – down US$275m as more mail was taken off planes and put on trucks.
USPS’s largest over-the-road carrier, 10 Roads Express, ranked second on the list, with US$734m in revenue, a US$30m increase from last year; and its largest non-transportation supplier was Victory Packaging – which provides packaging materials the agency gives to mailers – with US$271m in revenue.
Oshkosh Defense moved up to fifth spot in Culhane’s ranking with US$379m in revenue as the company gears up production of the Postal Service’s Next Generation carrier delivery vehicle.
Valuing suppliers
“Postal spending on outside suppliers shows that, at core, the agency is a transportation and logistics business,” said David Hendel, a partner at Culhane PLLC, whose law practice focuses on issues that arise under Postal Service contracts. “The agency continues to face challenges posed by declining mail volume, rising postal rates and labor productivity. Suppliers who can help the Postal Service overcome these challenges should be highly valued.”
Hendel has compiled the Top 150 list annually since 1999. The list is based on data received in response to Freedom of Information Act requests and seeks to consolidate entries for affiliated companies.
The complete list of the Top 150 suppliers is available at www.postalcontractor.com.