A key intermediary that connects the U.S. Postal Service with air transport provided by FedEx Express (NYSE: FDX) is opening new locations to move Priority Mail.
In the past three weeks, Cargo Force has launched new processing centers in Milwaukee; Tampa, Fla.; and Pittsburgh. A new facility in Boston is scheduled to begin operations Oct. 1.
Companies providing terminal handling services behind the scenes for the Postal Service vary by city. Cargo Force, based in Coral Gables, Fla., recently won a tender to operate the four locations for up to seven years and now provides mail handling in 10 locations, Chief Operating Officer Jared Azcuy said in an interview.
Local mail plants send Priority mail to Cargo Force warehouses, where it is scanned and sorted by destination, packed into containers and tendered to FedEx. After FedEx flies the shipment to the destination city, Cargo Force retrieves and unpacks the containers, sorts and scans the mail by zip code, and delivers it to local mail centers. Postal drivers then carry the individual parcels to homes and businesses.
“We do several surface visibility scans so when you track your Priority package online, some of those scans are coming from us,” Azcuy said.
Cargo Force is leasing a 25,000-square foot facility on airport property in Tampa. The proximity to FedEx’s air operation saves time because mail can be delivered more quickly. In other locations, the mail handler sets up as close as possible to the airport and FedEx facilities.
Cargo Force’s biggest facility, recently expanded to 120,000-square feet, is in Kearny, N.J., near Newark International Airport. Newark is an important hub for cross-country mail flights.
The new facilities have about 50 employees. Boston will require twice as many personnel, Azcuy said. In Tampa, workers will earn $17.05 an hour, based on Department of Labor wage determinations.
Azcuy said the USPS is focused on strengthening its Priority Mail network, especially with so much personal protective equipment moving through the system from online orders during the COVID crisis.
Cargo Force is privately held by Harren Equity Partners, Littlejohn & Co. and founder/chairman Tony Romeo. The group also owns Alliance Ground International, which provides cargo handling and freighter ramp handling services for airlines around the country, and The Cargo Security Co.
Cargo Force, which also provides ramp handling for airlines in South Florida, generates about $62 million in annual revenues, according to its website.
In 2017, FedEx Express extended its express air transportation contract with the USPS through September 2024.
(Correction: An earlier version of this story misspelled the town of Kearny.)