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The contract between UPS (UPS) and the United States Postal Service for SurePost expired on December 31, 2024 and earlier this week the Postal Service posted an industry alert which implies that the two parties did not to a new agreement on SurePost, JPMorgan analyst Brian Ossenbeck tells investors in a research note. The firm points out this is a different agreement than the air cargo contract UPS won from FedEx (FDX) in 2024. JPMorgan says the issue is gaining attention of investors but it has not seen any official commentary from UPS. It expects UPS will walk through the strategic rational and financial implications on the Q4 earnings call on January 30. Overall, JPMorgan views the move as a long term positive for parcel pricing as well as UPS, but says notes it is unsure how well prepared the network is to in-source SurePost volume immediately after peak season considering FedEx originally estimated its transition of a similar service would take roughly a year.
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