Magazine article American Banker

Check Courier's Fed Pacts Cushion Fall

Magazine article American Banker

Check Courier's Fed Pacts Cushion Fall

Article excerpt

By landing a pair of contracts to handle some shipments for the Federal Reserve banks, the check courier AirNet Systems Inc. has found at least a small financial cushion as the volume of checks continues to decline.

The Columbus, Ohio, company, the nation's largest courier of canceled checks, announced Tuesday that it had signed two contracts to serve the Fed's Check Relay Network. The primary agreement is for weekend shipments moving among Federal Reserve check processing sites; the second is for scheduled and expedited weekday service between Federal Reserve sites that continue to process a large volume of checks.

AirNet said it expected the agreements to contribute about $3 million of revenue during their two-year terms, based on current volumes and anticipated trends.

The contracts will only slow the decline in AirNet's bank service unit, the largest of its three business lines. In the third quarter alone, its bank services revenue fell $3 million from the year earlier, to $24.6 million.

AirNet's volumes have fallen as banks increasingly cleared checks via imaging and other methods. Its weekday cancelled check pounds shipped per flying day - its preferred method of measuring volume - fell 30% in the third quarter compared to the year earlier.

Jeffrey B. Harris, AirNet's chief operating officer, said the additional volume would improve the courier's operating efficiency.

"This expanded relationship will improve our shipment density and utilization of AirNet's weekend and weekday daytime systems," he said in a press release. …

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