USPS’s new bid-based program for DDU (destination delivery unit, aka the local post office) access creates both opportunities and challenges for shippers navigating the evolving last-mile landscape.
Key takeaways
- In early 2026, shippers will be able to bid for access to USPS’ last-mile DDU network under negotiated agreement
- USPS’s nationwide footprint may become a revenue-generating option for retailers and carriers
- Operational readiness will be critical for shippers’ success with the new program
- Flexibility to adapt and make data-based decisions in response to the ever-changing choices in transportation & logistics will remain a priority for shippers in 2026
What’s changing
USPS announced that it will accept bids to leverage its last-mile delivery network in late January or early February 2026.
According to USPS, "Shippers who wish to access the DDU network will have the ability to propose a combination of volume, pricing, and tender times at each location, with deliveries for successful bidders being made by USPS that same day or the next day, at the customer's preference."
USPS framed the bid solicitation as a way to leverage its universal service obligation and extensive last-mile reach to provide value to a wider range of logistics companies and retailers, while also gathering incremental value for the financially challenged agency. While not explicitly stated in the announcement, it appears that retailers and carriers alike will be eligible to bid.
It’s particularly notable that this shift is happening under new USPS leadership, coming just a year after the DDU discount was eliminated. After pulling back a fixed workshare incentive that was no longer economically sustainable, USPS is reintroducing last-mile access through a more controlled, market-driven mechanism.
Loop’s perspective
Expanding USPS’s unmatched last-mile footprint from not only a universal service obligation but to a revenue-generating asset represents a major strategic shift.
The real impact will depend on execution. Pricing, minimum volume thresholds, tender-time requirements, and how granular access is at the individual DDU level will determine whether this is viable beyond a small group of very large shippers. In theory, the mode could create new same-day or next-day delivery options in dense or hard-to-serve markets. In practice, if pricing or operation constraints resemble traditional USPS agreements, adoption could be limited. It also places USPS in more direct competition with UPS, FedEx, and regional last-mile providers at a time when parcel economics are tightening across the industry.
For shippers, this represents opportunity, but with real complexity. Participation will likely require significant, DDU-dense volume, particularly lighter weight and smaller parcels, along with the ability to manage first and middle-mile transportation to the DDU. Shippers will also need operational maturity to support new tracking expectations, customer experience impacts, carrier mix changes, and increased sortation complexity. While the bid process may streamline historically slow NSA negotiations, success will depend on whether a shipper’s network, volume profile, and technology are ready to support it.
History of USPS workshare program
Automation in shipping may feel new, but USPS has been building it into its network for nearly 50 years. The USPS Workshare program was designed to reduce USPS costs by incentivizing mailers and shippers to perform portions of USPS’s processing and transportation work themselves in exchange for discounted rates.
In the 1970s, USPS faced mounting volume and increasingly inefficient manual processes. To automate and optimize its network, USPS introduced its first Workshare discount in 1976: a one-cent deduction for presorting First-Class Mail by ZIP code. Over time, those early incentives expanded, with deeper discounts rewarding greater levels of presort and induction, ultimately evolving into the workshare practices that underpin today’s parcel and mail networks.
The Destination Delivery Unit (DDU) discount is a specific workshare incentive granted when shippers induct parcels directly at the local post office that serves the final delivery address. Carriers leveraged the DDU discount by using USPS as a last-mile delivery partner rather than as a direct shipper—tapping into USPS’ universal service obligation to reach every address in the U.S., six days a week.
This model allowed carriers to lower their residential delivery costs while still offering nationwide coverage, especially in rural and low-density areas where last-mile is most expensive. USPS benefited by receiving parcels already sorted and positioned for final delivery, while carriers benefited from the discounted USPS rates and avoided running inefficient last-mile routes.
Under former Postmaster General (PMG) Louis DeJoy, USPS eliminated its DDU discount in 2024, driven by a need to better align pricing with rising last-mile delivery costs. As parcel volumes grew, the discount no longer reflected the cost of final delivery, particularly in rural areas.
Its removal increased last-mile delivery costs and disrupted hybrid carrier models, forcing shippers and carriers to reprice services, adjust networks, and rethink their reliance on USPS for final delivery.
Now, under new leadership led by PMG David Steiner, USPS is reengaging shippers around its final-mile capabilities.
Loop’s data-first approach can help
In today’s complex and dynamic parcel industry, having access to trustworthy, comprehensive, and real-time shipment data—presenting in a useful way to identify ways to optimize transportation and improve customer satisfaction—is critical. Loop’s Transportation Data Platform is designed to do just that.
From managing multi-carrier networks to optimizing last-mile delivery and navigating evolving USPS programs, the operational and strategic challenges are significant. Loop helps shippers reduce complexity, optimize costs, and maintain high service standards, turning industry challenges into opportunities.
Contact us at Loop if you’re looking for help taking control of your transportation data and gaining new insights from real-time visibility and audits.
