USPS Expands Lastmile Delivery for Retailer Cost Savings

Published: 02/04/2026
Last Mile Delivery USPS Logistics Opportunities
USPS is opening its last-mile delivery network, potentially offering retailers and logistics companies opportunities to reduce costs and accelerate delivery times. The fairness of the bidding process, predictability of pricing and service levels, and the ability of both parties to effectively manage increased operational complexity will be crucial to the program's success. Shippers should closely monitor USPS announcements, assess their own needs and capabilities, and consider partnering with third-party logistics providers to capitalize on this new opportunity.
USPS Expands Lastmile Delivery for Retailer Cost Savings

The United States Postal Service (USPS) is poised to revolutionize last-mile delivery with an unprecedented move to open its extensive network of over 18,000 Destination Delivery Units (DDUs) to commercial partners. This strategic shift could dramatically alter the logistics landscape, offering retailers and shippers new opportunities to reduce costs and accelerate deliveries.

A Historic Network Opens for Business

USPS, with its century-old infrastructure and unparalleled reach, plans to implement a competitive bidding process in early 2024 that will grant various shippers access to its last-mile delivery network. The service delivers to over 170 million addresses at least six days weekly as part of its universal service obligation, positioning it as a natural leader in final-mile logistics.

Postmaster General Louis DeJoy emphasized the strategic importance: "The last mile typically represents the highest-cost portion of any delivery route. Our existing network visits every address daily, creating unique opportunities for cost-effective solutions that benefit both shippers and the Postal Service."

Potential Benefits for Shippers

  • Cost Reduction: Last-mile delivery often accounts for a significant portion of total shipping expenses. USPS's existing infrastructure could dramatically lower these costs.
  • Faster Deliveries: Leveraging USPS's nationwide network could enable same-day or next-day delivery capabilities for more retailers.
  • Expanded Coverage: The ubiquitous USPS network reaches areas often underserved by private carriers.
  • Operational Efficiency: Outsourcing last-mile delivery could allow businesses to focus on core operations.

Industry Perspectives

Logistics experts have offered mixed reactions to the announcement. Rob Martinez of Shipware called it "potentially transformative" but cautioned that success depends on execution details like pricing structures and operational requirements.

Paul Yaussy of Loop noted the strategic significance: "USPS is treating last-mile access as a revenue-generating asset rather than just a universal service cost. This reflects broader trends as carriers seek new income streams in a tightening parcel market."

Implementation Timeline

The initiative will roll out in phases:

  • Bidding process opens: Late January/early February 2024
  • Winners notified: Second quarter 2024
  • Service begins: Third quarter 2024

Strategic Considerations

Analysts suggest the move could position USPS in direct competition with major carriers like UPS and FedEx, while also creating new options for retailers seeking to optimize delivery strategies. However, questions remain about how the program will accommodate shippers of varying sizes and whether pricing structures will prove competitive.

The success of this initiative may ultimately depend on USPS's ability to balance operational complexity with shippers' needs for predictable costs and service levels. As the logistics industry continues evolving, this development represents one of the most significant changes to last-mile delivery options in recent years.

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