USPS Opens Last-Mile Network in High-Stakes Bid to Reshape Delivery

WASHINGTON, DC – December 17, 2025 – The U.S. Postal Service today announced a landmark strategic shift, unveiling plans to open its vast and valuable last-mile delivery network to third-party shippers through a competitive bidding process. This move will grant businesses of all sizes unprecedented access to over 18,000 USPS delivery destination units (DDUs) nationwide, potentially reshaping the competitive landscape of e-commerce and package delivery.

Beginning in early 2026, shippers will be able to bid for same-day or next-day delivery services, proposing their own combination of package volume, pricing, and tender times at each location. The initiative represents a bold attempt by the financially strained institution to monetize its most powerful asset: its unparalleled daily reach into every American community.

"In the logistics business, the most expensive part of delivery is generally the 'last mile' portion of a route," said Postmaster General and CEO David Steiner in the announcement. "As part of our universal service obligation, we deliver to more than 170 million addresses at least six days a week, so we are the natural leader in last-mile delivery."

A Financial Lifeline for an Ailing Giant

The decision to commercialize its last-mile network is not merely a new business venture; for the Postal Service, it is a critical measure for survival. The agency has been on the Government Accountability Office's (GAO) "High Risk" list for financial viability since 2009, having posted net losses totaling over $100 billion since 2007. The GAO has repeatedly described the USPS business model as "unsustainable," projecting that the agency could run out of cash as early as 2026 under current conditions.

This new initiative is a cornerstone of the "Delivering for America" plan, a 10-year strategic overhaul launched in 2021 to restore the organization to financial stability. The plan aims to generate $24 billion in new net revenue, largely by expanding its package delivery services. Projections for fiscal year 2026 anticipate a crucial 9.4% revenue increase from the package segment, even as overall mail volume continues its secular decline.

By opening up its DDU network, USPS is betting it can convert its biggest operational requirement—the Universal Service Obligation to deliver everywhere—into a significant revenue stream. "Because our delivery operations are already visiting every home and business daily, we can help shippers reduce their costs while generating much-needed revenue for the Postal Service," Steiner explained. This strategy aligns with a $40 billion modernization investment in a new vehicle fleet, upgraded facilities, and advanced technology, all aimed at positioning the Postal Service to compete effectively in the modern logistics market.

Reshaping the Last-Mile Battlefield

The Postal Service's entry as a broad-based last-mile contractor could send shockwaves through the logistics industry. For years, private carriers like FedEx and UPS have utilized the USPS network for the final leg of deliveries, particularly in rural and low-density areas where it is not cost-effective for them to operate. This new program, however, allows shippers to bypass these intermediaries and contract directly with USPS.

This could significantly increase competitive pressure on private carriers and e-commerce giants like Amazon, which has spent years building its own delivery fleet. The USPS offering is particularly attractive to small and mid-sized online retailers who struggle with the complex pricing, fuel surcharges, and residential delivery fees common among private carriers. With products like its Ground Advantage service, USPS already offers simple, often lower-cost shipping for lightweight parcels without adding rural delivery surcharges, a significant advantage for businesses serving a national customer base.

Industry experts note that while large players like Amazon and Walmart are expanding their private fleets, the USPS network remains the only one with the mandate and infrastructure to reach every address. This new bidding system allows any shipper, from a national retailer to a local business, to leverage that unrivaled reach. "We want to allow customers to custom-build their last mile solution," Steiner said. "Our last mile can become our customer's last mile."

A Marketplace for Delivery: How the New System Will Work

The new program is designed to create a dynamic marketplace for last-mile services. The bid solicitation process, set to launch in late January or early February 2026, will allow shippers to propose specific terms tailored to their needs, a departure from the one-size-fits-all approach that has historically limited DDU access to a handful of very large customers.

Before the platform goes live, USPS will engage with potential shippers to refine the bidding mechanics and ensure the system is effective and user-friendly. Successful bids will be formalized through Negotiated Service Agreements (NSAs), which are customized contracts that require approval from the Postal Regulatory Commission (PRC). The PRC's oversight ensures these agreements are financially beneficial to the Postal Service and do not compromise its public service mission.

The timeline is ambitious: USPS expects to notify winning bidders in the second quarter of 2026, with new services under these NSAs scheduled to begin in the third quarter. This swift rollout reflects the urgency of the agency's financial situation and its confidence in its recently upgraded package processing capacity.

Balancing Public Service and Commercial Ambition

This initiative places the Postal Service squarely at the intersection of public service and commercial competition. The Universal Service Obligation, long viewed as a costly public mandate, is being strategically repositioned as a powerful commercial advantage. The fact that postal carriers are already on every street, every day, makes the incremental cost of adding more packages significantly lower than for any competitor starting from scratch.

This move to monetize a taxpayer-funded infrastructure for commercial gain while maintaining a public service mandate is a delicate balancing act. However, the Postmaster General argues the two are symbiotic. By generating new revenue from its existing network, the agency can better fund its universal service mission and ensure its long-term sustainability without relying on taxpayer dollars for its operating expenses.

As it celebrates its 250th year, the U.S. Postal Service is making one of its boldest moves yet. By transforming its delivery network into an open platform, the historic institution is not just seeking a financial lifeline but is also aiming to redefine its role in the American economy for the next century, proving that its most enduring asset is its presence in every community. The success of this last-mile revolution will be a critical test of whether this legacy institution can adapt and thrive in the fast-paced world of digital commerce.