Imagine receiving your online orders not after days of waiting, but as quickly as local packages—delivered the same or next day. The United States Postal Service (USPS) is working to turn this vision into reality. In a bold move, USPS recently announced plans to open its "last-mile" delivery network to shippers of all sizes, granting them access to over 18,000 Destination Delivery Units (DDUs) across the country. But can this strategy help USPS reverse its financial struggles while offering retailers and logistics companies faster, more economical delivery services?
USPS’s Last-Mile Ambition: Opening DDUs Through Competitive Bidding
USPS plans to implement this initiative through a competitive bidding process, expected to begin accepting bids by late January or early February next year. Before launching the bidding platform, USPS will engage with shippers to gauge interest and refine the process based on feedback. Further details will be released in the coming months.
"In logistics, the most expensive segment is often the last mile," said Postmaster General and CEO David Steiner. "As part of our universal service obligation, we deliver to over 170 million addresses at least six days a week, making us the natural leader in last-mile delivery. We want to offer this valuable service to customers of all sizes—including logistics firms and retailers—who recognize its potential. This is a compelling proposition for shippers striving to deliver goods as quickly and reliably as possible. Our solution is a fair bidding process that lets the market determine the optimal local delivery attributes and volume-driven pricing. Since we already visit every home and business daily, we can help shippers reduce costs while generating much-needed revenue for USPS."
Modernization Investments Expand Capacity
USPS emphasized that recent modernization efforts have equipped it to handle a larger share of national shipping demand. The agency aims to collaborate with customers to meet diverse needs and shipping volumes.
Timeline: Service Launch Expected in Q3 2024
Under the plan, USPS will formalize bids for its Parcel Select product’s direct-to-consumer capabilities through Negotiated Service Agreements (NSAs). Winning bidders will be notified in Q2 2024, with services commencing in Q3.
Expanding DDU Access: From Select Clients to Broad Participation
Previously limited to a handful of large clients, USPS now intends to broaden DDU access. The agency expects this shift to boost revenue, improve financial sustainability, and help retailers achieve same-day or next-day delivery through redesigned last-mile services.
Industry Perspectives: Opportunities and Challenges
Rob Martinez, founder of Shipware, called the plan "a win-win on paper," noting shippers could tap into an established nationwide last-mile network while USPS monetizes underutilized assets. "This could be transformative for U.S. logistics," he said. "The potential to lower last-mile costs and enable faster delivery is real. If executed well, USPS could become the default last-mile provider for retailers seeking cost-effective speed." However, he cautioned that unknowns—such as bidding mechanics, pricing predictability, and operational complexity—could hinder success.
Adi Karamcheti, a Shipware consultant, offered a contrasting view, suggesting the move might target Amazon or UPS. "USPS claims this is open to small shippers, but scale matters for direct network injection," he said. "Playing chicken with Amazon is high-risk—they could accelerate building their own network."
Paul Yaussy of Loop noted the announcement signals a strategic pivot for USPS, monetizing its most expensive and complex delivery segment. "No private carrier can replicate USPS’s footprint," he said. "But adoption beyond major shippers depends on pricing structures, volume requirements, and operational flexibility."
The Last-Mile Plan: Promise and Uncertainty
USPS’s initiative presents significant opportunities but faces formidable challenges:
Potential Benefits:
- Revenue Growth: Expanded DDU access could attract more shippers and volume.
- Efficiency Gains: Better utilization of existing networks may reduce per-unit costs.
- Service Enhancement: Faster, more reliable last-mile delivery could improve customer satisfaction.
- Market Reshaping: USPS could emerge as a preferred partner for cost-efficient rapid delivery.
Key Challenges:
- Execution Risks: Bidding fairness, pricing models, and operational scalability remain untested.
- Competition: USPS must contend with UPS, FedEx, and Amazon’s proprietary networks.
- Internal Readiness: Operational efficiency and service quality under increased demand are unproven.
- Adoption Barriers: Shippers may hesitate without competitive pricing and flexibility.
Unanswered Questions:
Critical unknowns include bidding specifics, pricing strategies, service guarantees, and capacity management. The coming months will reveal whether USPS can translate ambition into reality—potentially redefining last-mile delivery in America.