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UPS Contract Overview. MTAC November 2006. Tony Pajunas. 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

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ups contract overview

UPS Contract Overview

MTAC

November 2006

Tony Pajunas

why a contract with ups

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
contract information

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
contract information4

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
shared network

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
dedicated network

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
benefits

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