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The Honolulu Advertiser
Posted on: Wednesday, June 20, 2001

FedEx begins setting up shop at post offices

Associated Press

WASHINGTON — Nationwide installation of Federal Express drop boxes at post offices got under way yesterday.

 •  United States Postal Service
 •  FedEx
FedEx and the post office announced a business alliance in January. It calls for FedEx to carry Express, Priority and first-class mail on its national aviation system and to place its collection boxes outside postal facilities.

"Ultimately this business alliance will strengthen the Postal Service, help it manage its costs, grow revenue and improve services," said Patricia M. Gibert, a Postal Service vice president.

Depending on the final number of drop boxes placed at post offices, FedEx will pay the Postal Service between $126 million and $232 million over the seven-year term of the deal.

The U.S. Postal Service said it expects to save about $1 billion in air transportation costs while extending the market of its Express Mail next-day, and Priority two-day services.

The seven-year $6.3 billion transport contract also has guarantees by FedEx Express to ensure on-time performance.

In March, the post office and FedEx began testing the use of the drop boxes by placing 113 of them in Charlotte, N.C., and Fort Lauderdale, Fla.

National deployment will begin with expansion to 38 more markets, for an estimated 3,000 drop boxes, by August. By October, 70 more markets will have the boxes.