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Overview of UPS Transportation Contract: Key Features and Benefits

This document outlines the UPS transportation contract initiated in November 2006, detailing its significance in the post-9/11 landscape of air logistics. It explains how the contract supports First Class and Priority Mail services, highlighting a dedicated network for USPS use to enhance capacity and reliability. The contract spans three years with options for extension, servicing 41 origin cities and expanding to 98. Key benefits include dependable service, a favorable pricing structure, and the capability to handle high volumes, including HAZMAT and live animals, while ensuring security and redundancy in logistics.

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Overview of UPS Transportation Contract: Key Features and Benefits

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  1. UPS Contract Overview MTAC November 2006 Tony Pajunas

  2. UPS Contract Overview Why a contract with UPS? • World changed post 9/11 • FedEx & commercial passenger air • Doubled our requirements for Priority lift • FedEx only for Priority • Commercial suppliers reduced from 33 to 7 suppliers in 06 • Commercial capacity reductions • Move to Regional Jets

  3. UPS Contract Overview Contract Information • Three year air transportation contract runs through June 2009 • Option for a 2 year extension • Network currently serves 41 origin cities • Off shore locations – ANC, HNL, SJU included • Expansion planned to serve up to 98 cities

  4. UPS Contract Overview Contract Information • Supports First Class Mail and Priority Mail • Initial volume – 700,000 pounds per day • UPS provides integrated end to end service • UPS accepts live animals, registered mail and HAZMAT • Shared and Dedicated network

  5. UPS Contract Overview Shared Network • Shared Network is space on the existing UPS Fleet • Tuesday through Friday service • Currently 700,000 lbs • Primarily First Class Mail • Fleet can expand to approximately 1.4 million pounds daily

  6. UPS Contract Overview Dedicated Network • Dedicated aircraft are planes put up solely for USPS use • 550,000 lbs a day to begin in 07 • Tuesday through Friday service • Eight dedicated round trip flights will serve 16 origins • Serves cities impacted by reduced commercial lift

  7. UPS Contract Overview Benefits • Consistent and reliable service provider • Replaces poor performing commercial air service • Provides additional transportation capacity for Priority Mail & FCM • Favorable pricing structure • Creates network redundancy • Avoids commercial air security issues

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