UPS and USPS Reunite: Renewed Ground Saver Deal Brings Back Hybrid Final-Mile Deliveries

In a welcome development for shippers seeking cost-effective delivery options, UPS and the U.S. Postal Service (USPS) have finalized a renewed agreement that brings the Postal Service back into the fold for select Ground Saver and Mail Innovations deliveries.

After a year-long separation, this partnership is set to resume imminently, promising greater flexibility and expanded coverage for UPS's economical shipping service.

A Return to Proven Collaboration

The renewed deal marks the restart of a familiar hybrid model. UPS will hand off certain Ground Saver packages to USPS for last-mile delivery, a practice that previously powered the service under its old name, UPS SurePost. Deliveries are expected to begin within the next week, with volume ramping up progressively throughout 2026.

UPS spokesperson Jim Mayer confirmed the timeline, noting that the Postal Service will also handle portions of UPS Mail Innovations volume. In an official statement, UPS emphasized the mutual benefits:

“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.”

This reunion follows months of negotiations, accelerated after David Steiner assumed the role of USPS Postmaster General in July 2025. A preliminary agreement on volume and rates was first announced by UPS CEO Carol Tomé in October, paving the way for today's finalized contract.

What Changed—and What’s Coming Back

The partnership was paused at the beginning of 2025 when USPS revised its agreements with commercial partners. UPS opted to bring all Ground Saver deliveries in-house to avoid potential service disruptions and cost increases, resulting in:

• An average rate increase of nearly 10%

• Temporary limitation of coverage to the contiguous U.S.

• Exclusion of PO Box deliveries

With the new agreement in place, these restrictions are being lifted. Ground Saver will soon once again reach addresses in Alaska and Hawaii, as well as PO Boxes, restoring broader accessibility for shippers.

Strategic Benefits for UPS (and Cautious Optimism for Shippers)

The deal allows UPS to offload a portion of last-mile costs to USPS, potentially improving margins on Ground Saver volume. Industry analysts note that this cost reduction could provide a modest boost to UPS's bottom line—something Wall Street is likely to view positively.

However, as supply chain expert Nate Skiver of LPF Spend Management pointed out in a recent LinkedIn analysis, the benefits may tilt more toward UPS than end customers:

“UPS will realize reduced costs for a portion of Ground Saver volume… But UPS won’t be decreasing rates. Or pursuing new business through aggressive pricing.”

While transit times could lengthen slightly for packages handled by USPS, the return of expanded coverage and economical options remains a net positive for businesses that rely on cost-conscious ground shipping.

Looking Ahead: Implications for Your Supply Chain

This renewed collaboration underscores the value of strategic partnerships in logistics. By leveraging USPS's extensive final-mile network, UPS can optimize its operations while maintaining competitive service levels—benefits that ultimately flow to shippers who prioritize affordability without sacrificing reach.

At Gain Consulting, we help businesses navigate these evolving delivery landscapes, from carrier negotiations and rate optimization to multi-carrier strategy design. Whether you're evaluating economy services like Ground Saver or building a more resilient supply chain, our team is here to guide you.

Stay tuned for more updates as this partnership rolls out in the coming weeks. Have questions about how these changes might impact your shipping costs or strategy?

Contact us today—we’d love to discuss how we can help you stay ahead in 2026 and beyond. 🚚📦