UPS and USPS Are Expanding Their Delivery Partnership

According to a recent report from SupplyChainDive, UPS is rapidly scaling its renewed last-mile partnership with the U.S. Postal Service, with daily handoffs rising from about 977,000 packages in Q1 2026 to a projected 1.5 million in Q2. The move is part of UPS’s strategy to improve profitability by shifting lower-margin deliveries out of its own network.

The companies previously worked together through UPS SurePost, but UPS ended that arrangement in 2025 due to cost and reliability concerns. After leadership changes at USPS, both sides agreed to a new deal that began ramping up in January 2026.

Now, USPS handles final-mile delivery for a growing share of UPS Ground Saver and Mail Innovations packages. This allows UPS to focus more on higher-margin shipments like business-to-business and healthcare logistics.

For shippers, the main change is that USPS may now handle the final leg of delivery for economy packages, with tracking reflecting that handoff. As the transition stabilizes, UPS expects improved cost efficiency and more consistent service under the new setup.