Washington, D.C. — Spending on goods, services, and facilities by the U.S. Postal Service totaled $21.4 billion in Fiscal Year 2023, increasing by nearly $3 billion from last year. Once again, transportation-related contractors dominated, taking 7 of the top 10 spots.

As it has for over 20 years, FedEx leads the list as the Postal Service’s top supplier, with $1.6 billion in revenue. But FedEx’s total was $300 million less than last year and $536 million less than the year before. The decline in revenue shows USPS is making good on its promise to shift more mail from air to surface transportation. FedEx’s top ranking has one more year to go, as it was announced that United Parcel Service would be taking over the agency’s primary air network in October 2024, which is the start of FY 2025. UPS also had $339 million in USPS revenues in FY 2023, making it the agency’s second-largest air carrier.

The Postal Service’s largest over-the-road carrier, 10 Roads Express, ranked second on the list, with $734 million in revenue, a $30 million increase from last year. But this is likely its high water mark as the Postal Service gives more work to transportation brokers. Another carrier, Matheson Trucking Inc., was the agency’s eighth-largest supplier in FY 2023 but was driven into bankruptcy and ceased operations earlier this year.

The Postal Service’s largest non-transportation supplier – aside from aggregated utility and telecom payments – is Victory Packaging, which provides packaging materials the agency gives to mailers.

On the way up is Oshkosh Defense LLC, which moved into the fifth spot with $378 million as the company gears up production of the Postal Service’s Next Generation carrier delivery vehicle.

Brokers are well represented on the list, with ITS National LLC taking the ninth spot with $248 million in revenues. Other brokers on the top 150 list include Traffix USA, Eve International Logistics, Fives Intralogistics Corp., and XPO Logistics.

The top ten USPS suppliers received $5 billion, about the same as last year’s group. Overall, the top 150 USPS suppliers received $14 billion, a $1.4 billion increase from last year. The top 150 received 65 percent of the agency’s total spend, a few percentage points lower than last year’s top 150.

As usual, transportation was the agency’s biggest spend category at $9.7 billion. Of that amount, $6.6 billion was for highway transportation and $3.1 billion for air transportation. Highway transportation increased by nearly $500 million and air transportation decreased by $275 million as more mail was taken off planes and put on trucks.

Transportation spending has increased every year since 2020, when it totaled just under $8 billion, notwithstanding the agency’s recent efforts to insource more local transportation. While insourcing a route removes the expense from outside transportation spend, it increases overall USPS costs beyond the reduced spend. Insourcing costs more than outsourcing due to postal driver work-rule inflexibility and other agency expenses. Nonetheless, the agency plans to expand its insourcing of local transportation work.

The next biggest expense categories were Services ($1.4 billion) and Information Technology ($1.2 billion). Other large spending categories include Vehicle Maintenance ($864 million), Fuel & Utilities ($778 million), and Vehicle Fuel ($714 million).

“Postal spending on outside suppliers shows that, at core, the agency is a transportation and logistics business,” said David Hendel, a partner at Culhane PLLC, whose law practice focuses on issues that arise under Postal Service contracts. “The agency continues to face challenges posed by declining mail volume, rising postal rates, and labor productivity. Suppliers who can help the Postal Service overcome these challenges should be highly valued.”

Hendel has compiled the Top 150 list annually since 1999. The list is based on data received in response to Freedom of Information Act requests and seeks to consolidate entries for affiliated companies.

The complete list of the Top 150 suppliers is available at www.postalcontractor.com, a website Hendel created that provides key background information on postal contracting.

The top ten USPS suppliers for FY 2023 are shown below:

(* denotes consolidated entries.)

The above list was compiled based on data received under a Freedom of Information Act request and covers payments made between October 1, 2022, and September 30, 2023, and is not audited. When companies are believed to be affiliated or under common ownership, we have often consolidated their separate entries under the company with the highest individual ranking or best-known name. Consolidated listings contain an asterisk. Our consolidations vary from year to year, and this may affect numerical rankings. City/state designations are derived from USPS’s payment records and may not be the contractor’s primary location.

About David P. Hendel

David’s legal career began as an Honors Attorney in the U.S. Postal Service General Counsel’s office, where he reviewed contracts, advised procurement officials, and litigated disputes. Entering private practice, he advised companies on issues arising under civilian and defense agency contracts, including matters of contract administration, performance, and compliance. David has represented hundreds of contractors, from Fortune 50 companies to small businesses, on a wide range of matters including: bid protests, contract administration and interpretation, claims, terminations, fraud investigations, and False Claims Act matters. He frequently authors articles and presents seminars on postal contracting topics. He also created the www.postalcontractor.com website. His bio may be found here.

About Culhane

Proudly shaking up the legal marketplace since 2013, Culhane is a new type of law firm. Using technology, advanced cybersecurity, and a team-based approach, our attorneys have access to everything they need without the expense of a centralized, common physical location. By eschewing large law firm overhead, our reduced cost structure allows us to provide cost-efficient legal services. And the best part is that all of our attorneys are partners who have joined us from large firms or highly regarded in-house legal departments.

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