FedEx (NYSE:FDX) shares are down more than 2% premarket after the company revealed in a filing that its agreement to provide domestic transportation services for the United States Postal Service (USPS) will expire on September 29, 2024.
According to FedEx, the two parties were unable to reach an agreement on mutually beneficial terms to extend the contract. The negotiations concluded on March 29 "following extensive discussions."
FedEx Express will continue to provide air transportation services domestically and to Puerto Rico until the contract expires on September 29, 2024.
Following the news, FedEx shares are trading around the $283.50 mark premarket. The stock has had a solid year so far in 2024, up 15.2%. In the last 12 months, it has gained more than 30%.
Meanwhile, UPS (UPS) announced Monday that it has been awarded a significant air cargo contract by the USPS. The company will become the USPS's primary air cargo provider and move the majority of USPS air cargo in the US.
"Together, UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable, and efficient integrated network," said UPS CEO Carol Tome.