As an avid online shopper, you‘ve probably had this experience: eagerly awaiting a package, obsessively checking the tracking info, and marveling at how fast your order traverses the country. Here‘s a little secret about how your mail pulls off these seemingly impossible cross-country and international journeys so quickly: it takes to the skies.
The US Postal Service shipped over 3 billion packages in 2021, with a sizable chunk of those parcels traveling by air. What many consumers don‘t realize is that the agency accomplishes this airborne logistics feat without operating a single plane. Instead, the USPS relies on an intricately coordinated network of contracted planes from commercial airlines and cargo carriers to get our mail off the ground and to its final destination.
In this in-depth guide, we‘ll unpack the fascinating and little-known story of how the USPS moves mountains of mail by air without its own aircraft. We‘ll explore the agency‘s key airline partnerships, the economics of air mail, and what it all means for you as a consumer. Plus, we‘ll share some surprising history on how early USPS airmail contracts played a pivotal role in launching the commercial aviation industry.
By the Numbers: The Massive Scale of USPS Air Transportation
To understand the Postal Service‘s air shipping strategy, it helps to grasp the immense scale of mail the agency must move each day. According to USPS data, here‘s a snapshot of the average daily volume:
- 425.3 million mailpieces processed and delivered
- 25.7 million packages delivered
- 2.7 million pieces of international mail processed
Delivering this daily avalanche of letters and packages requires a finely tuned multi-modal transportation network. Planes are the linchpins of the USPS‘s long-haul shipping infrastructure, rapidly moving mail between major metros and distribution centers across the nation and globe.
Just how much mail actually flies? The USPS reports that 21% of First-Class Mail is transported by air. For packages, that figure jumps much higher. A 2021 report from the USPS Office of Inspector General found that "air transportation constitutes over 65 percent of package volume."
It‘s no exaggeration to say that, without air transit, the USPS‘s package business would be grounded. And all this flying mail adds up to a hefty price tag. The Postal Service spent a whopping $4.6 billion on air transportation costs in 2021, a figure that has steadily climbed in recent years due to the explosion in ecommerce package volume.
The USPS‘s Flying Partnerships: How FedEx and Airlines Keep the Mail Moving
To handle its gargantuan air shipping needs, the USPS turns to the experts: commercial airlines and package delivery companies. Rather than incurring the expense of buying and maintaining its own planes and facilities, the Postal Service contracts with logistics specialists to efficiently move mail through the skies.
The USPS‘s largest and most important air partner is FedEx. The shipping titan maintains a dedicated fleet of 685 planes and a vast network of routes, hubs, and sorting facilities to keep USPS Priority Mail and First-Class Package Service zipping cross-country. So intertwined are FedEx and USPS air operations that the arrangement has been likened to a "virtual merger."
The FedEx-USPS relationship has had its share of turbulence though. The contract renewal in 2013 cut the Postal Service‘s costs but triggered a decline in on-time performance. And critics argue the deal gives FedEx too much pricing power over its largest customer. Nonetheless, the two recently renewed their pact through 2024, with the USPS paying FedEx around $2 billion per year for air services.
But FedEx isn‘t the only airline helping get your mail off the ground. The USPS also holds contracts with commercial passenger carriers to transport sacks of letters and boxes in planes‘ cargo holds. United Airlines inked a $167 million deal in 2021 to fly USPS mail domestically and internationally. American Airlines hauls USPS post under a $98+ million contract. Even niche regional airlines like Alaska Air and Hawaiian Airlines have USPS contracts valued at $39 million and $23 million respectively.
The Postal Service also partners with a roster of all-cargo airlines, who fly bulk shipments of parcels and mail on dedicated freighter jets. Kalitta Air, Amerijet, and Atlas Air are among the aircraft operators specializing in huge cargoes that help keep the USPS aloft.
Soaring Costs vs. Stamp Revenue: Why the USPS Outsources Its Air Operations
With air transportation playing such a pivotal role in mail delivery, why doesn‘t the USPS simply purchase and fly its own planes? Put simply: the economics don‘t work. The Postal Service‘s thin-margin business model, which relies on postage revenue to cover costs, can‘t realistically support the astronomical expense of building and operating an in-house cargo airline.
According to a 2020 report by the USPS Office of Inspector General (OIG), it would cost the agency an estimated $1.35 billion to purchase fifteen long-range wide-body cargo aircraft. The OIG also calculated that acquiring and operating a more modest fleet of four midsize freighters would cost around $785 million over 10 years.
Such an outlay would consume nearly all the revenue generated by USPS package services. In fiscal year 2021, First-Class Package Service brought in $6.49 billion while Priority Mail earned $13.86 billion.
But aircraft acquisition is just one component of the cost of operating an airline. The USPS would also need to shell out billions annually for jet fuel, pilot salaries, maintenance facilities, sorting equipment, and IT infrastructure. As a barometer, FedEx, spends around $6 billion per year just on jet fuel for its cargo fleet. That‘s triple what the USPS earns from Priority Mail.
Given these financial realities, contracting air services is unquestionably more cost-effective for the USPS than running its own planes. By outsourcing to the experts, the Postal Service gains access to cargo space and aviation resources it could never afford solo. Partnering with passenger airlines allows the USPS to efficiently use cargo holds that would otherwise fly empty. And tapping shipping providers gives the agency flexibility to nimbly scale capacity up or down to meet demand.
Still, the USPS‘s heavy reliance on contracted air transportation creates risks. Surging consumer demand has recently driven air cargo rates to record highs. Jet fuel prices have also skyrocketed, with a gallon costing over $3 in December 2021 compared to $1.35 a year prior. These climbing costs, which the USPS has little control over, threaten to make air mail more expensive or degrade delivery speed and reliability.
Airmail and Aviation: The USPS‘s Pioneering Role in Commercial Flight
The symbiotic relationship between the USPS and the airline industry stretches back nearly to the dawn of flight. In fact, airmail contracts from the Postal Service in the 1920s and 30s helped launch the fledgling commercial aviation business.
In 1918, the US Army began limited airmail flights between Washington, Philadelphia, and New York. Seeking to accelerate service, Assistant Postmaster Otto Praeger pushed to open airmail routes to private contractors in 1924. The initial group of 35 Army-trained pilots, later dubbed "The Suicide Club," set the stage for today‘s massive air transit of mail.
By the late 1920s, all US airmail was flown under contract with commercial carriers including Boeing Air Transport (later United Airlines), National Air Transport (later part of United), Western Air Express (later TWA), Colonial Air Transport (later American Airlines) and more. Airmail became the commercial aviation industry‘s first profitable business, proving the viability of flight as a means of civilian transportation.
In 1934, Postmaster General James Farley oversaw the rapid expansion of airmail routes and the standardization of pricing at 6 cents per ounce. Special red-and-blue-bordered airmail envelopes were introduced to speed sorting and transport. Civilians clamored to have their letters delivered by the wondrous new mode of air travel. By the end of the 1930s, airmail routes stretched for 63,000 miles and blanketed the nation.
Some of America‘s most iconic aviation pioneers earned their wings flying mail for the USPS. Charles Lindbergh worked as an airmail pilot before his famous solo transatlantic flight. Amelia Earhart also briefly transported mail for the USPS. And Bill Boeing founded his aircraft company with an eye toward winning airmail delivery contracts.
The USPS‘s pivotal role in nurturing the airline industry through airmail subsidies and service contracts laid the foundation for today‘s massive air cargo industry. What started as a novelty became an essential mode of delivering letters and parcels around the globe.
Ground Shipping Pivot: Why the USPS Is Throttling Back on Air Transit
After a century of close collaboration with the airline industry, the USPS is now looking to reduce its reliance on costly contracted air transportation. As part of a larger effort to cut expenses and regain financial stability, the agency implemented operational changes in 2021 designed to shift more volume to cheaper ground transit.
The Postal Service made the controversial case that trucks are more predictable and reliable than planes. While mail shipped over the road takes a day or two longer than via air, it is less susceptible to weather delays and airport congestion. Fewer late and lost packages means fewer angry customers and costly refunds.
Postmaster General Louis DeJoy‘s plan has slowed delivery times for First-Class Mail and Periodicals, raising the ire of many large mailers. A group of 21 state Attorneys General even sued the USPS, alleging that the agency acted outside its authority in relaxing service standards. But DeJoy has defended the move as necessary to modernize the agency and stem its chronic losses.
The pivot to more ground shipping also involves investing billions to upgrade the Postal Service‘s aged vehicle fleet to expand cargo capacity on trucks. The USPS is purchasing 40,000 new fuel-efficient delivery vans and has placed an initial order for 50,000 next-generation mail trucks from Oshkosh Defense. By 2026, the agency plans to acquire a total of 165,000 new vehicles, at least 10% of which will be electric.
However, Congressional Democrats and environmentalists have criticized the USPS for not moving fast enough to electrify its fleet. The agency contends that financial constraints and the need for long-range gas-powered trucks in rural areas necessitate a measured transition to EVs. A protracted fight over the USPS‘s vehicle procurement seems likely.
What does the USPS‘s reduced appetite for air shipping mean for online shoppers? In the short-term, you may have to adjust your expectations for how fast Economy and Standard ground packages arrive. Instead of 2-3 days cross-country, it may take 3-5 days. But barring a complete renunciation of air transit, your Amazon-level delivery speed demands will still be met. Just don‘t be surprised if your tracking shows your package taking a scenic journey by truck rather than a zip through the skies.
Eyes to the Skies: What‘s on the Horizon for USPS Air Mail
As the Postal Service navigates turbulent financial straits and an unrelenting tide of ecommerce packages, its air shipping posture will undoubtedly keep evolving. The imperative to cut costs amid inflationary pressures may incentivize the agency to further throttle air transit in favor of ground. But the USPS‘s universal service mandate means it can‘t completely abandon rapid delivery by air to far-flung locales.
Emerging aviation technologies could give the USPS new options for nimble, cost-effective air service in the years to come. The agency is exploring the use of drones for last-mile delivery to hard-to-reach addresses. Autonomous flight could help reduce costly pilot labor. Electric aircraft may offer lower operating costs than kerosene-powered planes. Supersonic jets could someday make coast-to-coast mail delivery possible in a matter of hours.
The USPS‘s appetite for innovation will be balanced against the realities of its balance sheet. Trillion-dollar tech companies like Amazon and Alphabet have the runway to experiment with delivery drones and robotic airships. The Postal Service, which is $206.4 billion in debt, has far less room for trial and error.
In the meantime, consumers can take comfort in the fact that the USPS‘s tightly meshed air mail network will keep humming along behind the scenes, powered by its time-tested airline partnerships. So the next time a letter or package you‘re eagerly awaiting seems to have gone off the radar, remember it could well be cruising at 35,000 feet thanks to the intricate interplay between your mailbox and the clouds.
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