Imagine browsing through endless products on e-commerce platforms, tapping your screen with the expectation of swift delivery. Behind this seemingly simple process lies the most costly and efficiency-challenged segment of logistics: the "last mile." The United States Postal Service (USPS) is attempting to break this bottleneck by opening its vast final delivery network, potentially reshaping America's logistics landscape. But will this bold move deliver the expected benefits—new revenue streams for USPS while improving retailers' delivery speed and efficiency?
USPS's Last-Mile Strategy: Opening DDUs to Competitive Bidding
USPS has announced it will open access to its more than 18,000 Destination Delivery Units (DDUs) to shippers of all sizes, aiming to leverage its last-mile network advantage. At the core of this initiative is a competitive bidding process that would allow more businesses to tap into USPS's final delivery capabilities, potentially reducing costs and increasing efficiency.
According to USPS plans, the bidding process is expected to launch in late January or early February next year. To ensure smooth implementation, USPS will engage with shippers beforehand to understand their needs and feedback, allowing optimization of the bidding platform for greater efficiency. More details about the bidding process will be released in coming months.
Postmaster General and CEO David Steiner explained: "In logistics, the most expensive part is typically the last mile. As part of our universal service obligation, we deliver to over 170 million addresses at least six days a week, giving us natural leadership in final delivery. We want to offer this valuable service to customers who recognize last-mile value—including other logistics companies and retailers of all sizes."
Steiner added: "We believe this presents a compelling value proposition for many shippers striving to deliver to their customers as quickly and reliably as possible. Our solution establishes a fair bidding process that lets the market find optimal local transportation attributes for the best volume-driven pricing. Since our delivery operations already visit every home and business daily, we can help shippers reduce costs while generating much-needed revenue for USPS."
USPS's Confidence: Modern Infrastructure and Underutilized Capacity
USPS emphasizes that recent modernization investments have equipped it with sufficient package processing and delivery capacity to meet—even exceed—current demand. This positions USPS to handle a greater share of domestic shipping needs while collaborating with customers to accommodate diverse requirements and volumes.
Implementation Timeline: NSA Negotiations and Service Launch
USPS plans to formalize bidding for its Parcel Select product's direct-to-consumer capabilities through Negotiated Service Agreements (NSAs). Winning bidders are expected to be notified in the second quarter of next year, with services commencing in the third quarter.
Strategic Implications: Revenue Growth, Sustainability, and Faster Delivery
By expanding DDU access beyond its current limited group of large clients, USPS anticipates increased revenue, improved financial sustainability, and—through redesigned final-mile services—helping retailers and other businesses achieve same-day or next-day delivery.
Industry Perspectives: Opportunities and Challenges
Rob Martinez, founder of Shipware, sees theoretical win-win potential: "Shippers gain access to an established nationwide last-mile network, while USPS secures meaningful new revenue by better utilizing existing capacity. This could be transformative for American logistics. The opportunity to reduce last-mile costs and enable same/next-day delivery is very real. If executed well, USPS could become the default national last-mile provider for retailers and logistics companies seeking faster delivery at lower cost. That said, many unknowns remain about the program's success: how bidding will work, pricing and service level predictability, and whether both sides can manage increased operational complexity."
Adi Karamcheti, Shipware's professional services consultant, offers a contrasting view: "This seems like USPS trying to get more from Amazon or restart UPS collaboration. Claiming the process is open to shippers of all sizes makes little sense—you'd need substantial scale to inject directly into the postal network. Playing chicken with Amazon seems high-risk; their response might be accelerating network development beyond current plans."
Paul Yaussy, Loop's parcel contract intelligence lead, calls this a meaningful strategic shift: "By opening its last-mile network to broader bidding, USPS is effectively monetizing its delivery chain's most expensive, operationally complex segment. With 18,000 DDUs and six-day weekly delivery to every address—a footprint private carriers can't replicate—they're treating last-mile access as a revenue asset, not just a universal service cost. That said, real impact depends entirely on execution. Pricing structures, minimum volume requirements, bid timing flexibility, and DDU-level access granularity will determine viability beyond very large shippers. Theoretically, this creates new options for retailers optimizing same/next-day delivery, especially in dense or hard-to-serve markets. Practically, adoption may be limited if pricing or operational constraints mirror traditional postal agreements."
From a market perspective, Yaussy notes this positions USPS in more direct competition with UPS, FedEx, and regional last-mile providers, reflecting carriers' broader search for new revenue as the parcel economy tightens. "For shippers, this signals last-mile strategy becoming more fragmented and negotiable—but it's unclear whether this will meaningfully reduce costs or just reshape last-mile capacity procurement. Traditionally, NSAs with USPS have been difficult to negotiate, with little urgency from USPS. One client needed nearly two years and extraordinary persistence to finalize an NSA."
Analyst Viewpoint: Opportunities, Challenges, and Potential Impact
From an analytical perspective, USPS's last-mile strategy presents several key considerations:
Opportunities:
• Leveraging existing assets: USPS's vast last-mile network covers every national corner. Opening DDUs could improve asset utilization.
• New revenue streams: With traditional mail declining, this could provide crucial new income.
• Enhanced competitiveness: More flexible last-mile services could help USPS compete with UPS and FedEx.
• E-commerce growth: More efficient, economical last-mile delivery could reduce logistics costs and accelerate e-commerce development.
Challenges:
• Operational complexity: Requires efficient bidding processes, pricing mechanisms, and service management.
• Quality control: Ensuring consistent high-quality service across diverse shippers.
• Pricing strategy: Balancing attractiveness to shippers with USPS profitability.
• Competitive pressure: Intense competition from UPS, FedEx, and regional providers.
• Amazon relationship: Requires careful management to avoid over-dependence or conflict.
Potential impacts:
• Lower logistics costs: Could make last-mile delivery more economical for businesses.
• Faster delivery: Optimized last-mile processes might enable same/next-day delivery.
• Market transformation: Could reshape U.S. logistics competition and create new opportunities.
Conclusion: A High-Stakes Gamble
USPS's last-mile strategy represents a bold gamble with significant opportunities and formidable challenges. Its success hinges on establishing efficient operations, competitive pricing, quality service, and balanced competitor/partner relationships. Regardless of outcome, this move will profoundly influence U.S. logistics, warranting close observation.
For shippers, USPS's DDU bidding presents a noteworthy opportunity to access more efficient last-mile delivery at potentially lower cost. However, prospective bidders must carefully assess needs, capabilities, pricing structures, and service terms before participating.
Ultimately, USPS is betting its future—and potentially reshaping American logistics—on the strength of its last-mile network. Whether this gamble pays off remains to be seen.