UPS SurePost volume moving away from US Postal Service, Teamsters say

On By Littum

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Diving card:

  • UPS SurePost packages are now being delivered only by UPS drivers, rather than a large portion of those packages going to the US Postal Service, a spokesperson for the Teamsters union told Supply Chain Dive.
  • “Millions of packages moved away from SurePost and the United States Postal Service and returned to UPS package trucks this month, and they are now being sorted and delivered by hard-working UPS Teamsters,” the union said in a Facebook post on Tuesday.
  • UPS did not respond to multiple requests for comment on the Teamsters’ claims about SurePost changes. However, SurePost information on the UPS websitebelow product features and how the deliveries take placeno longer mentions the Post Office. Previous versions of these overviews highlighted how SurePost leveraged the agency, including for PO boxes and addresses outside the contiguous United States
UPS SurePost’s listed options have changed
Previously listed Currently listed
Last-mile delivery provider US Postal Service, UPS UPS
Coverage United States 48 contiguous states, Alaska, Hawaii, Puerto Rico, all US territories, PO boxes and military APO/FPO destinations USA 48 contiguous states
Transit time Estimated 2 to 7 days in the contiguous United States, longer for other destinations Estimated 2 to 6 days

Diving Insights:

SurePost is one of many delivery services in the market that have relied on the Post Office’s robust last mile network for cost-effective shipping. Shipping partners such as UPS would drop off packages at postal service facilities closest to the end customer rather than delivering themselves.

The times are changing. UPS-employed drivers have taken over a larger share of SurePost volume under the Teamsters’ current contract agreement with the company. Meanwhile, the Postal Service is pushing consolidators to bring packages further upstream in its network through new contracts that eliminate installment discounts for delivery of delivery unit.

When asked about the Postal Service’s current role in SurePost deliveries, a USPS spokesman said in a statement that “some companies have negotiated new agreements with us and some have not.”

“Previous agreements did not reflect operational and financial realities, the evolving postal network or the enhancements to our portfolio of product offerings,” the spokesman added.

Not having the Postal Service as a SurePost partner means UPS has to figure out the best way to cost-effectively deliver millions of extra packages within a more streamlined network. The airline has cut capacity and closed several facilities under its “Network of the Future” initiative.

Using the postal service helped keep SurePost prices low because UPS itself could avoid making more expensive deliveries to remote and rural destinations, Tony Runyan, chief client officer at Red Stag Fulfillment, said in an interview. Now UPS will likely increase fees for packages going to those destinations, he added. Last month, the carrier announced it was planning fare and surcharge increases for SurePost effective January 13.

Runyan said SurePost could eventually evolve into a similar offering to FedEx Ground Economy, which previously relied on the Postal Service for last-mile delivery under the name “FedEx SmartPost.”

“I think that’s probably where it’s headed, where you’re going to end up paying more than you were for SurePost, but not as much as (UPS) Ground, and it basically won’t get the priority that Ground gets when it comes to delivery,” Runyan said.