Service might be in its name, but transportation is a major part of its game. If there was ever any doubt about how essential transportation is to the U.S. Postal Service’s operations, take a look at the list of the USPS’ top suppliers for fiscal year 2016. Five of the top 10 provide transportation services, according to the list compiled and published by law firm Husch Blackwell.
Topping the list for the 14th straight year is FedEx with nearly $1.7 billion in contract value – about a $300 million increase from last year. FedEx has a contract to carry package and letter mail for the Postal Service. The USPS recently renewed FedEx’s air cargo network contract running until September 2024.
In a short analysis on the list, Husch Blackwell notes that the Postal Service’s decision to buy more than 9,000 Ram ProMaster commercial vans propelled FCA US, LLC, (formerly known as Chrysler Group LLC) to the fourth spot on the list with $270 million in contract value. In addition, six more companies in the number 11 through 20 spots provide transportation services, including package and logistics giant UPS.
In its annual 10k financial filing, the Postal Service cites the strategic importance of transportation corporations “to provide distribution and delivery services allowing us to serve our respective customers’ needs. Maintaining these alliances is crucial to sales development and growth as they often provide us with introductions into new markets.”
After two years of declining or flat transportation costs, they creeped up in fiscal year 2016 to nearly $7 billion. Still, transportation costs make up only a small percentage of the Postal Service’s total expenses and in some cases, it might make sense to increase transportation costs if they lead to offsets in other costs. For example, closing an unused facility might increase transportation costs because mail will be trucked longer distances, but the facility and labor cost savings could offset those costs if done right.
The top 10 suppliers are listed below with transportation companies highlighted in red. Husch Blackwell compiles the list based on data received in response to a Freedom of Information Act request. Entries for companies believed to be affiliated or have common ownership were consolidated under the company with the highest individual ranking or best-known name. Husch and Blackwell has been compiling the list annually since 1999.
|Top 10 USPS Suppliers|
|Rank||FY15||Company||FY16 Revenues||Billing Location|
|1||1||Federal Express Corp.||$1,678,855,833||Pasadena, CA|
|2||2||Energy United Electric Membership Corp||$414,352,778||Statesville, NC|
|3||7||HP Enterprise Service, LLC||$285,942,420||Plano, TX|
|4||26||FCA US, LLC||$269,722,639||Auburn Hills, MI|
|5||4||Salmon Companies, Inc||$241,796,411||Little Rock, AR|
|6||5||Victory Packaging||$221,393,566||Houston, TX|
|7||8||Accenture Federal Services||$190,484,322||Chicago, IL|
|8||12||Eagle Express Lines, Inc||$178,603,404||South Holland, IL|
|9||9||Wheeler Bros., Inc||$177,388,988||Somerset, PA|
|10||10||Northrup Grumman Corp||$171,155,578||Merrifield, VA|