U.S. Postal Service, FedEx Express Sign Agreement for Domestic Air Transportation Through 2013; Contract Expected to Generate about $8 Billion in Revenue

MEMPHIS, Tenn.--(BUSINESS WIRE)--Aug. 1, 2006--FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX), and the U.S. Postal Service (USPS) today announced a new agreement for domestic air transportation of mail through 2013.

The Postal Service and FedEx Express signed a seven-year contract in 2001 for airport-to-airport delivery of mail within the United States. The contract announced today will replace the final two years of that contract and a new seven-year agreement will commence in October of 2006.

“The new contract allows the Postal Service and FedEx to continue our successful business relationship”

The agreement is expected to generate about $8 billion in revenue over the life of the seven-year contract.

FedEx Express will continue to fly over 4 million pounds of U.S. mail every business day - the equivalent of 40 wide-body DC10 aircraft using existing aircraft and facilities.

"The new contract allows the Postal Service and FedEx to continue our successful business relationship," said Postmaster General John E. Potter. "This relationship benefits postal customers by allowing us to maintain our high service standards while keeping costs affordable."

"Reaching a new agreement a full two years ahead of schedule is proof positive of the excellent relationship that FedEx has developed with the U.S. Postal Service," said David J. Bronczek, president and chief executive officer of FedEx Express. "We are proud of the trust the Postal Service has placed in us and their confidence in our fast, reliable and efficient service."

About FedEx Corp.

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $32 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 260,000 employees and contractors to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit www.fedex.com.

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Certain statements in this press release may be considered forward-looking statements, such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.'s and its subsidiaries' press releases and filings with the SEC.