Published on Sep 29, 2022
Postage Reseller Express One earlier today filed for a temporary restraining order and preliminary injunction preventing the USPS from terminating the Shipping Services Contract the parties entered into in December 2019.
The termination is set to become effective after Friday September 30, 2022, according to Express One’s motion.
Express One also sued the USPS on September 23 for breach of contract, among other things.
In its motion for a TRO, Express One alleges that the USPS devised a plan to obtain the company’s customer, pricing and business information so that it could develop its own competing platform.
“The USPS’s ultimate goal was to implement a competing USPS platform, terminate the reseller program, including Express One’s reseller contract, and take control of Express One’s business and profit margin,” Express One argues.
The motion provides information about the reseller program and efforts by the USPS to terminate the program, as well as alleged commitments to the reseller program from the USPS.
For years, The Capitol Forum reported about the shortcomings of the postage reseller program and how they resulted in a loss in USPS revenues by allowing resellers to offer discounts to existing USPS customers.
The USPS Office of Inspector General eventually investigated those shortcomings. While the OIG’s report was highly redacted, The Capitol Forum learned that the OIG concluded that lax oversight of contracting partners like Express One resulted in hundreds of millions of dollars in losses to the USPS every year.
Those findings, according to Express One’s motion, may have contributed to the USPS’ initial efforts to terminate the program in 2019.
Express One argues that the notice of termination and news of termination of the reseller program has already begun to cause irreparable harm to the business, as platform partners have learned about USPS’s decision to terminate the reseller contract. The company provides examples of customers that are exploring contingency plans in response to the USPS announcement.
“The USPS’s decision to discontinue the reseller program and terminate its 2019 Contract with Express One, if allowed to stand, will not only cost Express One hundreds of millions of dollars in damages, but will force the company out of business altogether,” Express One argues.
Interestingly, while USPS has long maintained that postal contracts are trade secrets, Express One actually filed its unredacted contracts in conjunction with the litigation.
USPS did not immediately respond to request for comment for this article.