BENEFITS EXPECTED FROM MAIL MERGER

As long as her mail is not delayed, Victoria Brazer of Jackson, Mo., won't pay much attention to the announced alliance between the U.S. Postal Service and longtime rival FedEx.

"I think I heard about it somewhere last week," Brazer said Monday on her way into the Cape Girardeau post office. Brazer, a Southeast Missouri State University employee, reacted like most people locally, but behind the scenes, a dramatic reorganization is planned for the way your package reaches its express destination.

Under the deal, FedEx will haul Express Mail and Priority Mail -- as well as some first-class mail -- for the post office. It will provide guaranteed space at a cost of $6.3 billion over seven years.

FedEx also will pay the Postal Service between $126 million and $232 million to place its collection boxes at post offices, depending on the number of boxes eventually installed.

U.S. Postmaster General William J. Henderson said the alliance "will leverage two great networks: the extensive reliability of FedEx planes and the coast-to-coast retail presence of the Postal Service."

Public to benefit

"Whenever the public and private sectors work together, the real beneficiary is the American public," said FedEx chairman Frederick W. Smith.

A postal representative said this is a nonexclusive agreement that it will make available to any company that offers overnight package service nationally.

Based in Memphis, Tenn., FedEx has some 665 aircraft that operate a worldwide overnight delivery system. The post office has a smaller fleet of leased planes and ships mail on commercial airlines.

Henderson said the new contract will put all express and priority mail in FedEx planes, providing fast, dependable service. The post office will phase out its leases and close its hub in Indianapolis, Ind.

"Overall, service to Americans should improve dramatically in priority and express mail and somewhat in first-class," Henderson said.

No changes locally

Cape Girardeau postmaster Mike Keefe said the alliance will not change the way the local post office handles the mail.

"This alliance is in regards to transportation by FedEx on their airplanes," he said. "We submit generally all our mail to St. Louis. They make all the determinations there what would go on commercial, FedEx or one of the post office planes."

Different products

The Postal Service and the FedEx delivery systems have long been seen as rivals, but Smith said their products differ. While FedEx specializes in overnight business parcels, averaging 8 pounds each, the post office's priority mail is a two-to-three day service that doesn't compete directly with FedEx. Overnight express mail tends to be lighter packages of documents, averaging just over a pound, Smith said.

Henderson agreed the two companies' products that can complement each other.

FedEx planes mostly operate at night, and Smith said the postal deal will let some of the planes fly during the day to provide added service. It will also mean FedEx will have to expand its fleet slightly.

Under the air carrier deal, taking effect in August, FedEx will provide about 3.5 million pounds of airlift capacity daily -- the equivalent of a wide-body DC-10 aircraft, to carry postal materials.

When the FedEx-Postal Service talks became public in September, there was discussion of having letter carriers deliver FedEx parcels to households, but that was not part of the final agreement.

However, Henderson said both sides will evaluate their cooperation as time goes by and changes could be made.

The deal is likely to draw opposition from competitors. United Parcel Service has questioned whether it would raise antitrust problems and Emery Worldwide, a subsidiary of CNF Inc. which operates some air transports for the post office, unsuccessfully sought a court order to block the deal.

Chris Howard of the Southeast Missourian contributed to this report.