The U.S. Postal Service will offer access to its last-mile delivery network to shippers large and small through a bidding process set to begin early next year. It’s a move designed to both increase revenue and also reduce the organization’s reliance on large enterprise customers like Amazon and UPS.
USPS has sold delivery service from its 18,000 delivery destination units (DDUs) — local facilities that sort mail for final delivery — for years, but only to a limited number of large customers. Now, USPS will open up that opportunity to a larger audience via a solicitation process that will begin in late January/early February 2026.
“As part of our universal service obligation, we deliver to more than 170 million addresses at least six days a week, so we are the natural leader in last-mile delivery,” said Postmaster General and USPS CEO David Steiner in a statement. “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.”
Amazon and USPS may be Reaching the End of the Road
The announcement comes amid rumblings that Amazon may be planning to end its partnership with USPS when its current contract expires on Oct. 1, 2026. Amazon has long been the Postal Service’s top customer, generating more than $6 billion in annual revenue (roughly 7.5% of total operating revenue) for the agency in 2025, according to the Washinton Post.
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Amazon also has been working for years to build out its own nationwide regionalized delivery network to reduce costs and improve delivery speed. According to the Washington Post, USPS and Amazon had been in talks to negotiate a new contract since February, but those discussions have “largely concluded with no deal.”
The Post Office Needs a Wider Revenue Stream
The loss of its largest delivery customer would be a blow to USPS; the organization is working to orchestrate a turnaround following $9 billion in net losses in 2025 and $9.5 billion in losses the previous year, reports Sourcing Journal. New Postmaster General Steiner, who took on the role in May this year, has been pushing for growth, with an expansion of the Postal Service’s first- and last-mile delivery assets seen as key levers.
Opening up last-mile services to smaller companies is a big move in that direction, with the Postal Service saying in its announcement that it “is extremely confident that the total amount of revenue generated by the organization’s DDUs will increase through this process and make USPS a more financially viable institution.”
Following extensive modernization investments, USPS now has package processing and delivery capacity to meet a much larger percentage of the nation’s shipping needs than it currently provides, according to the announcement.
“The Postal Service’s valuable last-mile network can now be our customer’s advantage,” said Steiner. “Our last mile can become our customer’s last mile. Remember, our universal service obligation means we are already going to every address six days a week, and so businesses — large and small, national, regional and local — can achieve same-day or next-day service through our ubiquitous reach. All of the current entry point locations will continue to exist and serve customers upstream, but our highly prized DDU last-mile entry will be the subject of this access initiative.”
Shippers looking to access USPS’s DDU network will be able to propose a combination of volume, pricing and tender times at each location, and the accepted bids will be formalized through negotiated service agreement contract (NSA). The Postal Service expects to open bidding in early 2026 and notify winning bidders by Q2, with service beginning in Q3 2026. More details on the bidding process and how to participate are expected to follow in the coming months.
