The U.S. Postal Service is betting on significant shipper interest in its new last-mile plan to counter declining package volume. The agency posted year-over-year revenue and volume drops for key shipping services in its fiscal first quarter. Despite strong growth for its USPS Ground Advantage product, steeper declines in other segments like Priority Mail dragged down overall results. Consequently, Postmaster General David Steiner highlighted the new last-mile plan as a critical revenue opportunity. He revealed that over 1,200 companies have requested access to the online bid portal, indicating substantial market interest.
The last-mile plan will allow shippers to bid for direct access to USPS facilities for final delivery. This initiative aims to leverage the Postal Service’s unparalleled delivery network. Steiner stated the portal’s activity “shows the dramatic interest in our last mile.” The strategy is part of a broader effort to find growth after years of financial struggles. The agency must now convert this interest into concrete, profitable partnerships to offset weaknesses in its traditional package business.
Quarterly Results Highlight a Mixed Performance
The USPS reported its results for the quarter ending December 31, 2025. The data revealed a tale of two segments. USPS Ground Advantage, the agency’s economical ground shipping product, saw revenue surge 26.9% year-over-year. Volume for the service jumped 24.1%. This growth demonstrates strong demand for value-oriented shipping. However, other services including Parcel Select, Priority Mail, and Priority Mail Express experienced steep declines. These drops were severe enough to offset the Ground Advantage gains, leading to an overall package volume decrease.
This mixed performance underscores shifting shipper preferences. Businesses and consumers are increasingly opting for cheaper, slower delivery options. The Postal Service’s universal network is well-suited for this trend, but its premium products are losing ground. The declining volume in higher-margin services puts pressure on the agency’s financial health. Therefore, the new last-mile plan is not just an expansion; it is a necessary pivot to capture new revenue streams and utilize existing infrastructure more efficiently.
Strategic Growth Priorities Outlined
Postmaster General Steiner identified three specific growth priorities for the agency. First, the USPS will seek strategic partnerships to expand its reach, volume, and relevance. The last-mile plan is the flagship example of this priority. Second, the agency aims to bolster its flagship products with tangible service improvements. Customers need to feel enhanced reliability for products like Priority Mail. Third, the USPS plans to leverage its first-mile assets. This involves capturing value earlier in the shipping pipeline through volume collection and returns services.
Steiner emphasized that while revenue growth is the primary focus, cost management continues. The agency recently formed a team to identify expense reduction and capital efficiency opportunities. He acknowledged the agency cannot “cost-cut its way to prosperity,” but stated, “we can certainly cut costs.” Network transformation initiatives under the “Delivering for America” plan will proceed. These include facility consolidations and transportation network optimizations designed to improve efficiency and service reliability simultaneously.
The Mechanics and Potential of the Last-Mile Plan
The last-mile plan operates through an online bidding portal. Shippers can bid for the ability to drop pre-labeled mail and packages directly at USPS destination processing centers or delivery units. This bypasses earlier network entry points, potentially saving shippers time and money. For the USPS, it increases utilization of its final delivery network, which is its core strength. The plan essentially monetizes the “last mile” as a standalone service for logistics companies and large retailers.
The strong initial sign-up of 1,200 entities validates the concept’s market appeal. Partners could include regional carriers, e-commerce platforms, and large retailers seeking to supplement their own delivery networks. If successfully scaled, this plan could provide a stable, high-volume revenue stream. It transforms the USPS from a competitor in the parcel market into an infrastructure partner for the entire logistics industry. This strategic shift could redefine the agency’s role in the modern supply chain.
Broader Context and Financial Challenges
The USPS operates under persistent financial pressure. It has reported net losses for over a decade, despite recent legislative relief from Congress. The package business is crucial for its future, as mail volume continues its structural decline. The first-quarter results show that even packages are not a guaranteed growth area without innovation. The last-mile plan represents one of the more creative attempts to leverage the agency’s unique advantages.
Success depends on execution. The agency must manage the technical and operational complexities of integrating external partners into its network. It must also price the service competitively to win bids while ensuring profitability. Furthermore, it cannot let this new initiative degrade service for its existing retail and business customers. Balancing these demands will be a significant management challenge. The coming quarters will reveal whether the promising interest in the last-mile plan translates into improved financial results and a sustainable path forward for the Postal Service.