With a new shipping service, USPS says it could handle extra demand sparked by UPS strike

The U.S. Postal Service is launching new package shipping offerings that officials say will be simpler to use and more reliable than existing services, as well as put the mailing agency in a good position to handle the influx of customers that a potential labor strike at one of its largest competitors could bring.  

USPS on Monday officially launched Ground Advantage, a new way for customers to ship packages that is replacing three existing postal offerings. The new product will make shipping easier and more reliable for mailers, postal officials said, and will make the agency more competitive with private sector logistics companies. The Postal Service will aim to ship all packages in the continental United States within two-to-five days under Ground Advantage, which officials said was only possible due to reforms to its delivery network made under Postmaster General Louis DeJoy’s modernization and financial stabilization plan. 

The launch coincided with a potential walk out at one of the Postal Service's primary competitors in the shipping space, which could lead to an onslaught of new work for the mailing agency. UPS’ collective bargaining agreement with the Teamsters union that represents 340,000 of its workers is set to expire at the end of July and the labor group said a strike is “imminent” after a recent breakdown in talks. Postal management, at least in part, attributed unprecedented delays it faced in 2020 to the excess business it took on when overruns at companies like UPS and FedEx led customers to look elsewhere for shipping services. Those delays occurred during the peak holiday season, meaning all parties were already at capacity. 

Jacqueline Strako, an executive vice president at USPS who serves as the chief commerce and business solutions officer, said workforce and other efforts would ensure the agency “absolutely can” handle more workloads as a result of a UPS strike. 

“We're well staffed and we've invested and made the right transportation network changes,” Strako said. “Again, it's a 10 year plan, so we're two years into the plan, but absolutely we are positioned to handle additional volume.” 

With the launch of Ground Advantage, the Postal Service is ending Retail Ground, Parcel Select Ground and First-Class Package Service. It plans to compete particularly with businesses sending packages of less than 25 pounds, whereas it previously focused on the under-five pound market. USPS will have better prices than its competitors, officials said, without the surcharges they include.

The Postal Service also instituted a previously announced price hike on Monday, bumping First-Class mail, packages and marketing products by 5.4%. DeJoy has increased rates at nearly every allowable time, using an authority he won in 2020, and repeatedly signaled he will continue to do so as part of his plan to allow USPS to find firmer financial footing.

Officials called the new offering a “direct result” of changes in DeJoy’s Delivering for America plan, such as the shift to unify mail and package delivery on the same trucks. The move away from air transportation in favor of more ground shipping has made the network more reliable, they added. 

“We feel we have created a powerful new business advantage for the Postal Service by harnessing our new integrated mail and package network through a single national ground product,” Strako said, adding the new product will cause companies to “reevaluate how they currently move their packages around the country.” 

Mike Plunkett, a former USPS executive and current president of PostCom, a group representing large-scale mailers, said much of DeJoy’s vision relies on postal management being correct in that prediction. 

“There’s a lot riding on it,” Plunkett said. He added the consolidation makes sense given the changes USPS has implemented to its network. 

Steven Monteith, USPS’ chief customer and marketing officer, confirmed the agency is depending on Ground Advantage to be a “volume growth driver.” 

The new business will be the "anchor of our efforts to fill our long haul trucks with America's packages,” Monteith said. 

In addition to increased integration between mail and packages, USPS is in the process of consolidating its operations by shifting processing away from individual post offices to more regional “sorting and delivery centers.” USPS has opened six such centers and is currently evaluating locations for 100 more. It plans to open four mega-centers in 2023. 

Strako noted the Postal Service has also evaluated the organization to ensure it has the right assets—meaning equipment and employees—in the proper locations. She added that the workforce—from call center employees to retail associates in post offices to plant personnel—have all been trained for the new offering. Ground Advantage will be available in any post office, through at-home “Click-N-Ship” and to businesses of all sizes. The Postal Service will pick up packages for free at homes and offices and include $100 of insurance on any item.