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Transportation Companies Dominate List of Top U.S. Postal Service Suppliers in Fiscal Year 2014

March 04, 2015

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Transportation contractors held five of the top 10 spots in the list of the agency’s Top 150 U.S. Postal Service Suppliers for fiscal year 2014. Federal Express Corporation was again the U.S. Postal Service’s largest contractor, a position it has held since 2002. Top-ranked FedEx’s fleet of aircraft carries a variety of postal service products, including packages, letters and Priority Mail.

FedEx earned postal revenues of $1.4 billion in 2014 – down from almost $1.8 billion in 2013. The Postal Service attributes these savings to reduced rates under a new seven-year Air Cargo Network contract, which commenced on Oct. 1, 2013. Package giant United Parcel Service is also among the agency’s largest suppliers, earning $123 million in Postal Service revenues and ranked No. 12. However, while they were removed from the top 10, another packaging company, Victory Packaging, jumped from No. 14 up to No. 4 with $214 million in Postal Service revenues. While FedEx and UPS are among the agency’s largest suppliers, they are also large Postal Service customers. The Postal Service provides last-mile carrier delivery for FedEx’s SmartPost and UPS’s SurePost ground services.

Other transportation-related companies in the top 10 include trucking company Pat Salmon & Sons Inc. ($226 million), military mail air carrier Kalitta Air LLC ($196 million), commercial airline United Airlines Inc. ($176 million) and auto parts supplier Wheeler Bros. Inc. ($159 million). Overall, the Postal Service spent $3.5 billion on highway transportation in 2014, a 3.5 percent increase from 2013.

Technology contractors also figure prominently in the top 10: Hewlett-Packard Co. is ranked No. 7 with $172 million in revenue and Accenture Federal Services is ranked No. 8 with $171 million. Hewlett-Packard’s $32.5 million payment to the U.S. Department of Justice to settle charges of alleged overbilling under its Postal Service contract did no harm to its business with the agency, which increased slightly from 2013. IBM, AT&T Corporation, and Deloitte LLP all placed in the top 20.

EnergyUnited Electric Membership Corporation, which provides consolidated telecommunication and energy billing services, remained the Postal Service’s second largest supplier with $434 million in revenue, most of which is paid out to other companies. The services provided include ordering, billing, auditing, rate analysis and reporting. Northrop Grumman Corporation, which has operated the Postal Service’s central repair facility in Topeka, Kan., since 1978 and provides equipment and services, rounds out the top 10 with $154 million in revenue.

The below list features the top 10 suppliers off the full report, showing rankings for Fiscal Year 2014 and 2013 (Oct. 1 – Sept. 30). The list is compiled annually by Husch Blackwell Partner David P. Hendel, whose Government Contracts practice focuses on Postal Service contracting matters. The list is compiled based on data received from the U.S. Postal Service in response to a Freedom of Information Act request. Entries are consolidated for companies believed to be affiliated or under common ownership.

FY 2014 Rank FY 2013 Supplier Name FY 2014 Revenue City, State
1 1 Federal Express Corporation $1,408,985,575.12 Pasadena, CA
2 2 EnergyUnited Electric Membership Corporation $433,947,370.45 Statesville, NC
3 4 Pat Salmon & Sons, Inc.* $226,058,006.23 Little Rock, AR
4 14 Victory Packaging $214,456,360.01 Houston, TX
5 3 Kalitta Air, LLC* $196,546,191.37 Ypsilanti, MI
6 5 United Airlines, Inc.* $176,568,690.27 Pasadena, CA
7 6 Hewlett-Packard Co.* $171,703,627.38 Atlanta, GA
8 8 Accenture Federal Services $170,856,752.85 Chicago, IL
9 9 Wheeler Bros., Inc. $159,298,582.16 Somerset, PA
10 7 Northrop Grumman Corporation* $154,790,095.31 Merrifield, VA

* denotes consolidated entries

Husch Blackwell’s Postal Service Contracting group assists clients in contracting with the U.S. Postal Service, and its members are knowledgeable regarding the needs specific to the postal industry. The team has compiled annual reports on the top U.S. Postal Service suppliers since 1999, developed and presented dozens of seminars on Postal Service contracting to thousands of attendees, and wrote the definitive treatise on successfully doing business with the USPS.