Seeking Alpha--In early December, the US Postal Service (USPS) announced the potential slowdown of First-Class Mail to a 2-3 day service as the fallout of closing approximately half of the service’s sorting facilities (see the USPS press release). The proposed move is a part of a larger reorganization to reduce costs by $20 billion by 2015. 

A first instinct is that the slowdown of the nation’s primary mail service will be a boon for other service providers, such as UPS (UPS) and FedEx (FDX). The logic is that with First-Class Mail moving slower, mailers who want faster delivery will use the alternatives in the place of the USPS. It is clear that volume will improve for UPS and FDX. However, this view only scratches the surface for FDX.

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