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November 15, 2000 10:41 AM, EST

Emery Worldwide Airlines and the U.S. Postal Service will terminate their Priority Mail contract Jan. 7, ending 13 months early what has been a tempestuous business relationship since its start in spring 1997.

The joint announcement was made Nov. 3 by the post office and Emery’s parent company, CNF Transportation () of Palo Alto, Calif. The contract termination comes in the wake of an Aug. 25 federal court decision that said Emery cannot abandon the postal contract, but that the Postal Service must come up with a better way of compensating the airline (9-18, p. 8).

Emery runs 10 Priority Mail sites in six eastern states: Florida, Massachusetts, New Hampshire, New Jersey, New York and Pennsylvania.

Although the contract is now scheduled to end in less than two months, the two parties could remain entangled past the Jan. 7 separation date. CNF would like to collect more than $90 million it says the Post Office still owes Emery.

For the full story, see the Nov. 13 print edition of Transport Topics. .