While we never discount the threat of an all-out attempt to sell off the Postal Service for corporate profit, there is also a very real danger of creeping privatization from within. A seemingly small policy change could have a big impact. It demonstrates a worrying direction of travel for the Postal Service – the move back to focusing on the last-mile delivery for the USPS.
So, why is that change a problem?
Focusing on the last mile means private shippers and mailing aggregators receive a discounted price to inject mail into the system at the delivery stage, skipping the majority of the postal system. While the focus on the last mile increases mail volume, it also diverts mail away from USPS’s own logistics network. That creates inefficiency upstream as sorting machines and trucks run far below capacity. The USPS effectively ends up creating a less efficient network for itself, while delivering the most expensive-to-deliver mail on behalf of rival companies.
The previous Postmaster General Louis DeJoy had labeled this practice “[incentivizing] the run-around and hollowing of our network through discounted pricing and [creating] an environment for consolidator shippers to thrive while we struggled to survive.”
Between 2021 and 2025, the Postal Service moved in the opposite direction, attempting to move more mail upstream so that it is sorted and transported by the USPS. Postal management increased published prices for last-mile delivery and set about renegotiating contracts to reflect that increase in order to move mail upstream, better using postal capacity.
In the December USPS Board of Governors meeting however, the new Postmaster General David Steiner announced that he would re-focus the USPS back onto “last mile” delivery. He reiterated the priority in a February 5, 2026 Board of Governors meeting.
This is not all bad, to be sure. One of the new policies is to work with retailers to provide delivery services on their behalf – a short step away from a long-standing proposal of A Grand Alliance to use the Postal Service’s vast real estate footprint to provide affordable, fast warehouse and fulfillment services to smaller retailers. That would bring new income and provide some competition to Amazon’s dominance of the sector.
However, the Postmaster General report also included a return to prioritizing last-mile fulfillment on behalf of rival shipping companies. That followed the October 2025 announcement that UPS and USPS had finally reached a tentative agreement for USPS to deliver UPS last-mile packages. Negotiations on the contract had broken down in January when UPS had balked at the Postal Service demand that package prices should reflect the “operational and financial realities” of delivering that mail. The new agreement was reportedly made on terms more favorable to the UPS.
So what does the return to last-mile have to do with privatization?
In a June 2025 hearing of the House Government Operations Subcommittee, privatizers from corporate think tanks and the private shipping industry made two complementary demands. They called for the restoration of deep discounts for last-mile delivery and for operations outside of the first and last miles (Post Offices, collection boxes and delivery) to be privatized.
The demands are complementary because when the increase in volume at the last mile comes at the cost of volume in the sorting, logistics and distribution network, the under-used sorting plants and half empty trucks become financial liabilities. Those same private sector rivals can step in and offer to take on that work (for a tidy profit).
So, shifting USPS focus to delivering last-mile mail pieces for rival companies,may give privatizers and outsourcers exactly the excuse they are looking for to extend the reach of corporate profit deep into the Postal Service and chip away at its unique public mission.