EMERY WORLDWIDE WINS JUDGMENT AGAINST U.S. POSTAL SERVICE

EMERY WORLDWIDE WINS JUDGMENT AGAINST U.S. POSTAL SERVICE

   Emery Worldwide Airlines, a heavyweight air cargo subsidiary of CNF Inc., was granted a summary judgment in a suit filed against the U.S. Postal Service over a contracted transportation and sortation services for USPS.

   Federal Senior Judge Reginald W. Gibson of the U.S. Court of Federal Claims upheld Emery Worldwide's claim that the USPS reneged on an August 4, 1998 agreement on pricing changes for the contracted services.

   Emery and the USPS entered into a contract in April 1997 for Emery to operate a network of 10 sortation and transportation processing centers for Priority Mail. Emery said it employs about 4,000 to operate the centers, located mostly along the eastern seaboard.

   According to Emery's suit, mail volumes were higher than U.S Postal Service projections and the USPS imposed numerous changes in performance requirements, which combined to significantly increase Emery's operating costs.

   These developments led Emery and the USPS to enter into the new pricing agreement. However, Gibson ruled on Aug. 25 that the agency never gave Emery its contract price for operating the contract in 1999 or 2000. He ordered USPS to respond to Emery's specific pricing proposal extended in February 1999 and that the pricing method still used by the USPS must be discontinued and that certain deductions the agency made from payments to Emery were improper. He gave the USPS until Oct. 12 to comply with the contract.

   Emery, which had original sought a breach of contract, said it “continues to negotiate with the Postal Service for resolution of all issues in dispute, including termination of the contract.”