UPS and U.S. Postal Service Renew Last-Mile Delivery Partnership for UPS Ground Saver Shipments

UPS and the U.S. Postal Service have renewed their last-mile delivery agreement, allowing USPS to deliver select UPS Ground Saver packages—expanding coverage, improving logistics flexibility, and optimizing final-mile costs.

UPS and the U.S. Postal Service (USPS) have finalized a renewed agreement that will once again allow USPS to deliver a portion of UPS Ground Saver packages, marking a return to a familiar last-mile delivery model for the two logistics giants.

According to UPS, USPS will begin handling select Ground Saver deliveries within the next week, with delivery volumes expected to increase gradually throughout the year. The renewed agreement also includes some UPS Mail Innovations volume, further expanding USPS’s role in UPS’s final-mile network.

Under the arrangement, UPS will transfer certain Ground Saver packages to USPS for last-mile delivery, particularly in regions where postal routes offer greater density and cost efficiency. This model mirrors UPS’s previous use of USPS for similar deliveries when the service operated under the name UPS SurePost.

Strengthening Last-Mile Flexibility

UPS said the renewed collaboration is designed to enhance flexibility while preserving service reliability.

“Our collaboration with the postal service will benefit our customers who need economical delivery options and will give us more flexibility as we continue to provide industry-leading on-time service,” the company said in a statement.

From a logistics standpoint, leveraging USPS’s extensive residential delivery network allows UPS to optimize route density, reduce last-mile costs, and improve coverage in harder-to-serve areas, including rural communities.

Background: Why the Partnership Was Paused

At the start of 2025, UPS temporarily ended its Ground Saver relationship with USPS after the Postal Service restructured its agreements with logistics providers that rely on its final-mile capabilities. At the time, UPS determined that the revised terms could introduce cost pressures and service risks, prompting the carrier to bring all Ground Saver deliveries in-house.

Following the split, UPS increased Ground Saver rates by nearly 10% on average and limited service coverage to the contiguous United States, excluding Alaska, Hawai‘i, and PO Boxes.

With the renewed agreement now in place, UPS has confirmed that Ground Saver coverage will once again extend beyond the contiguous U.S. and resume deliveries to PO Boxes in the near future—an important development for e-commerce shippers serving remote and non-standard addresses.

Leadership Shift and Strategic Realignment

Discussions around reuniting the Ground Saver service gained momentum after David Steiner assumed the role of USPS postmaster general in July, introducing a revised approach to the agency’s final-mile delivery strategy. By October, UPS CEO Carol Tomé confirmed that the two organizations had reached a preliminary agreement covering delivery volumes and pricing.

Impact on Shippers and the Broader Supply Chain

While the agreement is expected to reduce delivery costs for UPS on a portion of Ground Saver volume, industry analysts suggest the benefits for shippers may be more limited. Some experts note that transit times could increase slightly and that pricing remains a challenge for cost-sensitive customers.

From a broader logistics perspective, however, the deal highlights a continued industry trend: hybrid last-mile delivery models that combine private carrier networks with public infrastructure to improve efficiency, manage costs, and scale delivery capacity during peak demand.

As parcel volumes continue to grow and last-mile delivery remains one of the most expensive segments of the supply chain, partnerships like this underscore how carriers are rethinking network design to balance cost, coverage, and service performance.