UPS Wins Contract with USPS, Beating Out FedEx

UPS has won a multi-year contract to become the primary air cargo carrier for the United States Postal Service. In winning the contract, UPS has beat out its primary competitor, FedEx, which had previously acted as the USPS’ primary air carrier. Despite UPS’s big win, it’s not all bad news for FedEx. Without the contract with the USPS, the carrier will be free to increase efforts to pare down staffing and capacity at its air division, FedEx Express, which has struggled against plummeting parcel revenues in recent years.

Beyond UPS’s big win, the world of logistics is as dynamic as ever. Maersk has released a new statement on its operations in the Red Sea, and the fallout surrounding the Baltimore Bridge collapse continues to disrupt domestic and international supply chains alike. In an industry that’s always moving, here are the seven headlines you need to know.

UPS Beats Out FedEx for USPS Air Cargo Contract

UPS has recently been awarded a contract from the USPS to act as the postal service’s air carrier of choice. The contract effectively ends the 20-year partnership between FedEx and the USPS, a relationship strained in recent years by the postal service’s push to move volumes from air transportation to ground transportation.

“Together, UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable, and efficient integrated network,” UPS CEO Carol Tomé said in an April 5 statement.

UPS to Hire 300 Pilots for Anticipated Volume Uptick

UPS, a giant in parcel logistics, plans to hire more than 300 pilots to meet the anticipated increased demand resulting from the carrier’s new multi-year contract with the USPS. The agreement will last for five and a half years.

“The Independent Pilots Association Executive Board was informed that UPS HR is resuming their pilot hiring process to account for the additional volume surge that will occur as the year progresses,” the IPA, the union representing UPS pilots, said in a statement obtained by FreightWaves. “The initial projected estimate for hiring is expected to be 300+ additional crew members, which is subject to adjustment once the network plan for the additional USPS volume is finalized.”

Delta Taps Former Ceva COO to Lead Air Freight Division

Delta is competing against FedEx and UPS for a piece of the air parcel pie. To that end, It has chosen to bring on an industry leader to head up its air freight division. According to reporting from FreightWaves, the airline’s freight division will be under the direction of Peter Penseel effective June 1, following Penseel’s departure from Ceva Logistics, where he served as Chief Operating Officer.

Maersk to Continue to Avoid Red Sea for Foreseeable Future

Danish maritime carrier Maersk plans to continue rerouting ships around the southern tip of Africa for the foreseeable future, rather than transit the Red Sea. In January 2024 , Maersk was one of the first carriers to cease operations in the region following the start of persistent Houthi attacks in October 2023. However, Maersk did note that recent security operations undertaken by the European Union are an encouraging step in the right direction for reestablishing resilient maritime operations in the region.

“Regretfully, both our internal analysis, as well as insight we received from external sources, still indicates that the risk level in the region remains elevated,” Maersk wrote in a March 22 update. “We have seen attacks on commercial vessels increase in numbers, including the tragic attack on the vessel True Confidence, which resulted in the death of three crew members, and the sinking of the vessel Rubymar, which is posing a serious environmental risk. These incidents, unfortunately, highlight the lethal effectiveness of missiles currently used by Houthi attackers and are one of the reasons for the elevated security risk we have in place at the moment.”

FMC Seeks Major Payout From MSC for Alleged Violations

The Federal Maritime Commission is seeking a $63M civil penalty from MSC, the world’s largest maritime carrier, for multiple alleged violations of U.S. maritime commerce laws. The allegations include MSC excessively charging late fees on non-operating refrigerated containers and billing companies that had no relationship with the carrier.

“Each one of these violations negatively impacted the wider shipping community, displaying that the nature, circumstances, extent, and gravity of these violations to be pervasive,” said the FMC’s BEIC (Bureau of Enforcement, Investigations, and Compliance) in a recent statement, according to reporting from the Journal of Commerce.

Permanent Channel at Port of Baltimore to Reopen by the End of May

Despite the extensive clean-up following the collapse of the Francis Scott Key Bridge in Baltimore on March 26, port officials have said that they plan to reopen on a shorter than expected timeline. By the end of April, port officials hope to open a 235-foot-wide, 35-foot-deep federal navigation channel, followed by the reopening of the 700-foot-wide, 50-foot-deep permanent channel by the end of May.

“Thanks to the exhaustive work of the unified command during the last two weeks, including underwater surveys and detailed structural analysis of the wreckage, we’ve developed a better understanding of the immense and complex work that lies ahead,” Lt. Gen. Scott A. Spellmon, the commanding general of the U.S. Army Corp of Engineers, said in a statement obtained by Supply Chain Dive.

Truckers Impacted by Baltimore Bridge Collapse Receive FMCSA Waiver

The Federal Motor Carrier Safety Administration (FMCSA) has issued a waiver for trucking impacted by the collapse of the Francis Scott Key Bridge at the Port of Baltimore. The waiver, issued on April 4, will add two hours of additional driving time to the FMCSA’s 14-hour-on-duty limit. This hours-of-service waiver will apply to a wide range of products and commodities rerouted due to the bridge collapse and will allow Baltimore area drayage drivers forced to seek work at nearby ports to continue to operate despite the ongoing port closure, according to reporting from FreightWaves.

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