Kitty Hawk Cargo, a subsidiary of airfreight transportation provider Kitty Hawk, announced today it has inked a deal with the United States Postal Service (USPS) to manage a daytime air and ground cargo network for the upcoming holiday season, dubbed C-NET, from November 24-December 28.

The total value of the contract for Kitty Hawk could be as much as $29.33 million, which is based on successful performance.

Robert W. Zoller, Kitty Hawk president and CEO told Logistics Management that C-NET is a dedicated network solely for the USPS. The network will run out of Kitty Hawk’s sort facility in Fort Wayne, Indiana, and will be comprised of seven Kitty Hawk aircrafts, roughly 130 trucks procured by Kitty Hawk, more than 200 seasonal employees at the sort facility and 29 aircrafts contracted by the USPS. And Kitty Hawk will also oversee ground handling at cities within the C-NET geographies.

Zoller added that this initiative is not expected to have any type of negative impact for Kitty Hawk’s non-USPS customers.

“We believe the USPS staff determined that using a dedicated daytime network will improve their ability to serve their customers and to move first class and priority parcel mail/freight during periods of unusual volumes more efficiently and cost-effectively than in the past,” said Zoller. “This network is totally separate from Kitty Hawk’s normal scheduled overnight air and nationwide expedited ground freight network and, therefore, we are not anticipating any negative impact for our other customers or their shipments.”

Under the agreed-upon terms of the contract, volumes will range from 250,000 cubic feet of mail per day in the first two weeks of the contract to roughly 300,000 cubic feet in the third and fourth weeks. The C-NET network will operate six days per week, and Kitty Hawk is responsible for managing the network and is subject to penalties for inexcusable delays, according to contract terms.

He added that Kitty Hawk has worked on several smaller projects with the USPS within the last three years, citing how in the 1990’s Kitty Hawk worked regularly with the USPS as part of several special networks, the largest of which were usually around the Holiday period in November and December.

“Kitty Hawk’s business model has changed in the last few years and as a result of on-going discussions with the USPS about a number of possible projects and opportunities, in early 2006 they brought up the subject of a Holiday peak network,” said Zoller. “Their interest and discussions about a holiday network seemed to pick-up momentum in July and have been ongoing since.”