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UPS Contract Overview

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

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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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