Almost a year after the fallout from an expired contract, UPS and USPS are working to mend their partnership, reaching a preliminary understanding to resume their Ground Saver delivery collaboration. The relationship between the two carriers faced significant challenges earlier this year when UPS Ground Saver, formerly known as SurePost, abruptly ceased support for PO Boxes and addresses in Alaska, Hawaii, Puerto Rico, and APO/FPO locations.
Negotiations for last-mile delivery contracts broke down, with both companies attributing the issues to the other. This led UPS to transition towards handling SurePost/Ground Saver volumes internally as part of their Network of the Future initiative. Recently, however, it appears that UPS has realized the repercussions of that decision.
During the Q3 2025 earnings call, UPS CEO Carol Tomé addressed investors, highlighting the company’s changing dynamics with USPS since the appointment of new Postmaster General David Steiner in July. She noted that UPS quickly engaged with Steiner to explore a more cooperative approach.
Tomé pointed out that the average daily volume for UPS Ground Saver had decreased by 32.7% year-over-year. The decline was largely attributed to strategic shifts including actions taken with Amazon and efforts to cut lower-yielding e-commerce volume. However, she expressed optimism, stating that the two companies have reached a preliminary agreement regarding revenue and rates related to last-mile delivery for the Ground Saver service.
“There’s still more work to do, but we are confident we will reach an agreement that upholds our best-in-class service levels,” she said. The renewed partnership aims to leverage UPS’s strengths in middle-mile logistics and USPS’s capabilities in final-mile delivery.
Furthermore, the agreement includes provisions for UPS Mail Innovations shipments, which cater to small- to medium-sized businesses that send substantial quantities of letters, documents, and lightweight packages. However, it seems the advantages of this preliminary agreement may not be available in time to alleviate peak season pricing pressures for online sellers. Tomé underscored that it is too early to predict the impact on margins, advising investors not to expect benefits in the fourth quarter. She expressed hope that positive developments could start to materialize at the beginning of the new year.
In conclusion, the ongoing collaboration between UPS and USPS signals a potentially positive development for both companies and their customers, with more details to be revealed as negotiations progress through the end of the fourth quarter.