Postmaster General Louis DeJoy’s former company landed a $5 million highway-shipping contract last month with the United States Postal Service.
DeJoy continues to own a multimillion-dollar stake in XPO Logistics as of early October. The $5 million deal is the first regular contract for a postal route that XPO Logistics has signed with the USPS in more than a year. XPO’s last highway contract with the USPS was in December and was temporary. The one before that was in signed in July 2019.
XPO’s contract — to move mail for the next 18 months between Norfolk, Virginia, and Evansville, Indiana — has not been previously reported. The contract was negotiated in August and disclosed in mid-October as part of a quarterly update to a database of USPS suppliers.
The Postal Service will pay XPO $3.3 million annually to manage its route between the two cities, which are roughly 700 miles apart. The USPS database shows the contract has one of the highest annual rates out of more than 1,600 contracts the Postal Service initiated with outside firms in its most recent quarter, which is the first full quarter DeJoy has served as head of the agency.
DeJoy was a top executive of XPO before he left the company’s board in 2018. He had joined XPO after selling it the logistics company he founded, in a 2014 deal valued at $615 million.
XPO still pays DeJoy about $2.3 million a year in rent and expenses for 220,000 square feet of office space he controls in his home state of North Carolina. The company’s lease agreements for DeJoy’s properties run through 2025.
Stake in XPO valued as high as $75 million
Publicly traded XPO reported about $16 billion in revenue last year and some 50,000 corporate customers for its various logistics and supply chain services. DeJoy’s personal stake in the company was worth as much as $75 million earlier this year, according to DeJoy’s latest financial disclosure filed in June.
DeJoy donated $1.2 million to Donald Trump’s 2016 campaign and has been a controversial figure since starting the top position at the post office in June. House Democrats held a hearing in August in which they grilled the new postmaster about operational and labor changes he made in his first months on the job. Those changes, they argued, had slowed deliveries and hurt the dependability of the USPS just as millions of Americans were turning to it to deliver their mail-in Election Day votes during a pandemic.
Republicans have long said the sprawling Postal Service needs to be shrunk or privatized. The agency, though, is on track this year to generate nearly $5 billion in cash, its best performance since 2015, in large part because of its package delivery services for Amazon.com and other growing online retailers.
Democrats also raised concerns in the August hearing about DeJoy’s ties to his former company and what they called potential conflicts of interest. In early September, the New York Times found that XPO’s revenue from the Postal Service had surged since June by $14 million, during just 10 weeks. The Postal Service’s inspector general opened an inquiry into DeJoy’s personal finances and his ties to XPO, as well as the changes he…
Read More News: Postal Service awards $5 million contract to Postmaster DeJoy’s former company, XPO
