UPS and the U.S. Postal Service are moving forward with a preliminary agreement regarding the Ground Saver service, according to UPS CEO Carol Tomé. This agreement focuses on the delivery plan, encompassing aspects related to volume and rates. More specific details are expected to be established in the coming weeks and months.
Details of the Ground Saver Agreement
If finalized, this agreement will enable the Postal Service to assist UPS with lastmile delivery for Ground Saver shipments. Tomé expressed confidence in achieving an arrangement that maintains high service levels. She indicated that further updates will be provided at the end of the fourth quarter.
Background on Ground Saver
Ground Saver is a lowcost shipping option that offers slower delivery times. Previously known as UPS SurePost, this service depended on the Postal Service for delivering millions of packages. However, changes instituted by the Postal Service at the beginning of 2025 prompted UPS to handle its SurePost volume internally, citing concerns over cost and reliability.
Renewed Discussions with USPS
Following the appointment of David Steiner as the new Postmaster General in July, discussions for a new Ground Saver arrangement began. Tomé noted the goal was to establish a mutually beneficial relationship between UPS, the Postal Service, and their customers. This collaboration aims to utilize the strengths of each entity; finalmile delivery by the Postal Service and middlemile capabilities by UPS.
Current Challenges and Volume Decline
As negotiations continue, UPS has faced a significant decline in Ground Saver volume. The average daily volume decreased by 32.7% yearoveryear in the third quarter. Contributing factors include UPS’s decision to limit package deliveries for Amazon, as noted by EVP and CFO Brian Dykes.
- Ground Saver volume fell due to reduced Amazon package deliveries.
- UPS reported an $85 million impact from increased delivery stops in Q2.
- Challenges remain in achieving efficient delivery density across residential areas.
Tomé emphasized the need for better density in Ground Saver deliveries, underlining the significance of establishing a strong partnership with the Postal Service to enhance delivery efficiency.
In July, the Postal Service remarked that it does not publicly discuss specifics of its commercial partnerships. Further developments regarding this agreement are eagerly anticipated in the logistics community.