USPS to Allow All Shippers to Bid on Last-Mile Delivery Service

The United States Postal Service (USPS) plans to make its last-mile delivery service available to shippers of all sizes.

After offering a limited number of very large customers delivery service direct from its 18,000 delivery destination units (DDUs) for years, USPS will soon begin accepting bids from all shippers, it said in a Wednesday (Dec. 17) press release.

USPS will begin accepting bids in late January or early February, and it expects to notify winning bidders in the second quarter and begin service under the negotiated service agreement contracts (NSAs) in the third quarter, according to the release.

Shippers will be able to propose a combination of volume, pricing and tender times at each DDU location, and successful bidders will be able to choose to have the deliveries made by USPS the same day or the next day, the release said.

USPS plans to establish a dedicated bid solicitation platform after getting feedback from shippers, per the release.

The organization said in the release that it delivers to 170 million addresses at least six days a week, recently made extensive modernization investments, and now has the package processing and delivery capacity to meet “a much larger percentage of the nation’s shipping needs.”

“We see this initiative as a compelling value proposition for many shippers who we know are wrestling with the need to deliver to their customer as quickly and reliably as possible,” Postmaster General and CEO David Steiner said in the release.

“Our solution is to establish a fair bidding process that enables the marketplace to find the best mix of local shipping attributes for the best volume-driven pricing,” he added. “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.”

It was reported Dec. 4 that Amazon was considering expanding its own delivery network after talks with USPS stalled and the Postal Service said it planned to hold an auction and sell access to its facilities to the highest bidder, making Amazon compete with national retail brands and regional shipping companies.

“We were surprised to hear they want to run an auction after nearly a year of negotiations, so we still have a lot to work through,” a spokesperson for Amazon told PYMNTS at the time.

PYMNTS reported Dec. 4 that USPS relies heavily on parcel delivery revenue to offset the steep decline in traditional letter mail.