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FedEx Wins $10.5 Billion Postal Contract

By Rich Smith - Apr 24, 2013 at 5:38PM

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Why compete with the post office when you can profit from it?

Sometimes it seems less like FedEx (FDX 1.89%) 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.

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