Dive Brief:
- The U.S. Postal Service will soon deliver some UPS Ground Saver packages again after the two delivery giants finalized a renewed agreement, a UPS spokesperson told Supply Chain Dive.
- The Postal Service will begin making deliveries for the economy shipping service in the next week, with activity increasing as the year progresses, UPS spokesperson Jim Mayer said. The agency will also deliver some UPS Mail Innovations volume as part of the contract, he added.
- "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 to our customers," UPS said in an emailed statement. The Postal Service did not respond to a request for comment by publication time.
Dive Insight:
Through the arrangement, UPS will hand off certain Ground Saver packages to the Postal Service for last-mile delivery. The process is nothing new — UPS previously relied on the agency to make some Ground Saver deliveries when the service was called UPS SurePost.
At the start of 2025, the two sides halted their Ground Saver relationship as the Postal Service overhauled agreements with logistics companies that used its final-mile capabilities. UPS determined that the agency's changes could present service risks and cost challenges, and opted to make all its Ground Saver deliveries in-house.
After the USPS split, UPS raised rates on the service by a nearly 10% average, which executives said would ensure service remained strong. Coverage also became limited to the contiguous U.S. and didn't include PO Boxes. The service will once again cover addresses outside the contiguous U.S., such as those in Alaska and Hawai'i, and PO Boxes again in the near future, according to UPS' website.
UPS and the Postal Service began exploring a Ground Saver reunion when David Steiner took over as USPS postmaster general in July, bringing a new approach to the agency's final-mile strategy. A finalized deal has been in the works for months, with UPS CEO Carol Tomé announcing in October that the two sides reached a preliminary agreement covering volume and rates.
The deal is poised to benefit UPS moreso than its customers, LPF Spend Management founder Nate Skiver said in a LinkedIn post last week as signals surfaced that a deal was near. UPS' bottom line may see a slight boost, but Ground Saver transit times could increase and the service's pricing is still a hurdle for shippers, according to Skiver.
"So, UPS will realize reduced costs for a portion of Ground Saver volume. Which, assuming it’s material, analysts will applaud," Skiver said. "But UPS won’t be decreasing rates. Or pursuing new business through aggressive pricing."
