USPS used to deliver millions of UPS SurePost packages for the private carrier until the end of last year, when UPS renamed the service UPS Ground Saver and “in-sourced” delivery to its own drivers. But a reunion may be in the works, according to UPS.
Both UPS and FedEx offered lower-cost but slower-delivery services by handing off packages to the USPS for last-mile delivery (UPS SurePost – now Ground Saver; and FedEx SmartPost – now FedEx Ground Economy). It made sense, since the USPS delivers to every address 6 days a week.
But UPS said it experienced more delivery stops than it had anticipated with Ground Saver, whose volume declined 23% in the second-quarter, year-over-year. UPS said it has reengaged with the USPS and pointed to the Postal Service’s new leadership and its excess capacity. (See the rough transcript of UPS’s second-quarter earnings call via Fortune.)
UPS also pointed out it works with USPS on air cargo volume, business it won last year, which it said was fully implemented and “going great.”
According to Supply Chain Dive’s coverage of the Ground Saver news coming out of UPS’s earnings call, UPS “made more delivery stops for the service than expected in the second quarter, hurting results by about $85 million, according to (UPS CEO Carol) Tomé.”