Sometimes it seems less like FedEx (NYSE:FDX) is competing with the U.S. Postal Service, and more like it's depending on USPS to keep its profits going.
On Tuesday, FedEx announced that its FedEx Express subsidiary has signed a seven-year, $10.5 billion contract to haul mail around the country for USPS, extending a current contract that expires in September through late 2020. (That's assuming USPS is still in business in 2020.)
FedEx Express will provide airport-to-airport transportation of USPS Express Mail and Priority Mail within the U.S., continuing an arrangement it's had in place for 12 years now.
FedEx shares reacted positively to the news, rising 1.4% in Wednesday trading to close at $94.46.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends FedEx. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
This Chip Stock Could Make a Big Comeback in 2018
Synaptics' newest chip will help it tap the latest trend in smartphones.
Want Blockbuster Returns? Buy Studios, not Movie Theaters
Regularly going to the movies is losing its allure, changing the way the industry does business.
These 13 Banks Got the Fewest Complaints. Did Yours Make the Cut?
See whether your bank is one of the top complaint-receivers -- or if it made this list of 13 impressive financial institutions.