A U.S. Federal Claims court judge has upheld a $6-billion, no-bid air transportation contract between the U.S. Postal Service and FedEx Corp. that was being challenged by CNF subsidiary Emery Worldwide.
Emery had challenged the agreement, claiming that the contract should have been competitively bid. Emery's request for a temporary restraining order was denied a day before the deal was announced in January.
"We consider the Postal Service's pursuit of an exclusive agreement with FedEx to be irresponsible and anti-competitive and therefore not in the best interests of consumers," Emery president Kent T. Scott told the court.
Emery currently has a 10-year contract with the USPS and operates a $200 million per year hub-and-spoke air transportation network to handle U.S. Express Mail.
The contract between USPS and FedEx calls for FedEx to provide air transport for Express Mail and Priority Mail, and some first-class mail, beginning in August. As part of the agreement, FedEx drop boxes are being installed in post office locations.
The court has said it will issue a public decision after March 28.