The U.S. Postal Service (USPS) is set to initiate a bid solicitation process in late January or early February 2024, allowing shippers direct access to its last-mile infrastructure. This move aims to enhance delivery efficiency for both large and small businesses seeking faster service options.
The USPS announced that interested parties will be able to propose a combination of volume, pricing, and delivery times at each location. Successful bidders will have their packages delivered by the USPS either the same day or the next day, depending on customer preference. The agency expects to notify winning bidders by the second quarter of 2026, with services commencing in the third quarter.
Expanding Access to Delivery Destination Units
This new approach is designed to broaden access to USPS’s Delivery Destination Units (DDUs), which are the final stop in the network before mail and packages reach their destinations. Currently, access to these facilities has primarily been restricted to a select group of high-volume shippers, including package consolidators. These companies have traditionally utilized DDUs to bypass potential bottlenecks further upstream in the USPS network while benefiting from the agency’s extensive last-mile delivery capabilities.
Changes made during the leadership of former Postmaster General Louis DeJoy disrupted these established partnerships by eliminating contracted rate discounts that previously incentivized DDU use. Now, Postmaster General and CEO David Steiner is working to reverse this course, actively engaging with logistics companies and retailers to explore how they can leverage USPS’s last-mile assets.
“We want to make this valuable service available to a wide range of customers that see the worth of last mile access — other logistics companies and retailers large and small,” Steiner said in the USPS release. He emphasized that the bid process will enable companies to find the best mix of local shipping attributes for volume-driven pricing, potentially increasing revenue for the struggling agency.
Feedback and Future Developments
Before launching the bidding platform, the USPS plans to gauge interest among shippers and refine the process based on their feedback. Steiner stated, “We want to allow customers to custom-build their last mile solution. We want to make the service as convenient, cost-effective and efficient as possible.” He highlighted the agency’s strong performance scores in last-mile delivery, showcasing the efficiency of processing at local DDUs.
The announcement follows a report from The Washington Post that suggested a reverse auction process, which could compel major USPS customer Amazon to compete with other businesses for postal capacity. As a result of these developments, Amazon is reportedly considering whether to reduce its reliance on the USPS for certain deliveries and expand its own logistics network. The company did not respond to a request for comment on this matter.
This initiative represents a significant shift in how the USPS plans to engage with shippers and adapt to the evolving logistics landscape. By expanding access to its last-mile facilities, the Postal Service aims to enhance its service offerings while addressing financial challenges.
