On December 31, 2024, the United States Postal Service and UPS went their separate ways following the expiration of their SurePost contract.

Well, that didn’t last long.

In the Q3 earnings call, UPS CEO Carol Tomé announced that, “Due primarily to the actions we've taken with Amazon and to trim lower-yielding e-commerce volume, we recently reached a preliminary understanding on revenue and rates with the United States Postal Service to support last-mile delivery for our Ground Saver product.”

UPS and the USPS haven’t announced details yet, but we’re sharing what’s happened since UPS and USPS split, why they’re getting back into business together, and how you can save.

What Happened During Their Split?

In the past, UPS leaned on USPS to handle the final mile for millions of Ground Saver parcels. After the split, UPS rebranded SurePost as Ground Saver and brought all of those cost-effective, lower-priority shipments in-house.

In its Q2 earnings call, UPS revealed that the number of Ground Saver stops exceeded its expectations, resulting in an $85 million loss. In Q3, Ground Saver's average daily volume declined by 32.7% compared to the same time last year, with the Amazon glide-down partially responsible for the decrease. Tomé said they “estimate that the cost drag in the third quarter was about $100 million.”

What’s Coming for UPS and USPS?

By July, UPS hinted that its breakup with USPS might have been just a break.

In the Q3 earnings call, Tomé said she and the new Postmaster General, David Steiner, worked together to “create a win-win-win relationship: a win for the Postal Service system, a win for UPS, and a win for our customers.” Their win-win-win strategy? She says, “The way to do that is to leverage what they're best at, which is final mile, and what we're best at, which is middle mile.”

If the two can strike a deal focusing on doing what each does best, it can be lucrative for the carriers and beneficial for shippers. With details set to be finalized in the coming weeks and months, a plan should be in place by the end of Q4. One year apart, and the two will be together again.

Ground Saver Savings: Do This Now!

If you use Ground Saver, now is the time to negotiate. The carrier is on the cusp of a deal that, hopefully, will reduce the losses this service has incurred throughout the year.

A negotiated contract isn’t a one-and-done activity to check off a to-do list. It’s good business practice to review and renegotiate your contract with UPS on a regular basis.

When you sign up for a Savings Analysis with ShipRx, we’ll assess your current contract, identify savings opportunities, and develop a plan to maximize your savings.

ShipRx has a 100% success rate for clients. While UPS and USPS may have made mistakes in their relationship dynamic, choosing to partner with ShipRx is always a good idea.

Get started today with a free Savings Analysis.