The decision condenses the USPS LTL freight network from 20 national, regional and local carriers to just one transportation provider. The contract comes with options that allow USPS to extend the partnership through February 2012, and is worth at least $9 million per year.
"USPS sees this partnership as a collaborative effort that will take cost out of our entire supply chain, a process that is going to take time and investment," said Frank Scheer, material distribution systems specialist at USPS. "If CF can help USPS instigate change in how we exchange information and the way we adopt new technologies, this working relationship will deliver cost savings up and down the supply chain."
The wide variety of USPS freight moving on Consolidated Freightways trucks will give the $2.3-billion carrier several opportunities to uncover supply chain practices that can impact the Postal Service's LTL network of the future, USPS said.
Freight will move from more than a dozen vendors, between individual postal facilities, as well as from USPS distribution centers in Kansas, Indiana and California.
Before moving to a single-carrier, the USPS relied on up to 20 different less-than-truckload carriers.
"Lots of different carriers, serving lots of different markets, means lots of variables in terms of service and cost," Scheer says. "With one carrier, serving virtually every market in the continental U.S., we can streamline shipping processes, improve service consistency, rely on accurate freight invoicing and reduce loss or damage claims."
