Dive Brief:
- UPS SurePost packages are now being delivered by UPS drivers only, rather than a large portion of those parcels going to the U.S. Postal Service, a Teamsters union spokesperson told Supply Chain Dive.
- "Millions of packages moved away from SurePost and the United States Postal Service and returned to UPS package cars this month, now being sorted and delivered by hardworking UPS Teamsters," the union said in a Facebook post on Tuesday.
- UPS did not respond to multiple requests for comment about the Teamsters' claims of SurePost changes. However, SurePost information on UPS' website, including product features and how deliveries are made, no longer mentions the Postal Service. Previous versions of those overviews highlighted how SurePost leveraged the agency, including for PO Boxes and addresses outside the contiguous U.S.
UPS SurePost's listed capabilities have changed
| Formerly listed | Currently listed | |
|---|---|---|
| Last-mile delivery provider | U.S. Postal Service, UPS | UPS |
| Coverage | U.S. 48 contiguous states, Alaska, Hawaii, Puerto Rico, all U.S. Territories, PO Boxes and Military APO / FPO Destinations | U.S. 48 contiguous states |
| Transit time | Estimated 2 to 7 days within the contiguous U.S., longer for other destinations | Estimated 2 to 6 days |
Dive Insight:
SurePost is one of many delivery services in the market that have relied on the Postal Service's robust final-mile network for cost-effective shipping. Shipping partners like UPS would drop off packages at Postal Service facilities closest to the end customer, rather than delivering themselves.
Times are changing. UPS-employed drivers have been taking on 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 rate discounts for delivery unit dropoff.
When asked about the Postal Service's current role in SurePost deliveries, a USPS spokesperson said in a statement that "some businesses negotiated new agreements with us, and some have not."
"Prior agreements failed to reflect operational and financial realities, the evolving postal network, or the enhancements to our portfolio of product offerings," the spokesperson added.
Not having the Postal Service as a SurePost partner means UPS has to figure out the best way to deliver millions of additional packages cost-effectively within a more streamlined network. The carrier has been slashing capacity and closing several facilities under its "Network of the Future" initiative.
Using the Postal Service helped keep SurePost pricing low, as UPS could avoid making more expensive deliveries to far-flung and rural destinations themselves, Tony Runyan, chief client officer at Red Stag Fulfillment, said in an interview. Now, UPS is likely to increase fees for packages going to these destinations, he added. Last month, the carrier announced it was planning rate and surcharge increases for SurePost effective Jan. 13.
Runyan said SurePost could eventually evolve into a similar offering as FedEx Ground Economy, which formerly relied on the Postal Service for final-mile delivery under the "FedEx SmartPost" name.
"I think that's probably where it's headed, where you're going to wind up paying more than you were for SurePost but not as much as [UPS] Ground, and it's essentially not going to get the priority that Ground gets when it goes to delivery," Runyan said.
