UPS & USPS Reunite on Ground Saver; UPS’s 2026 Rate Hike and Surcharge Overhaul

UPS has announced a preliminary agreement with the U.S. Postal Service to revive their partnership on Ground Saver, signaling a major shift in last-mile delivery strategy, according to Supply Chain Dive. The deal would once again make USPS responsible for the final-mile portion of Ground Saver shipments, allowing UPS to focus on middle-mile operations and overall network efficiency.

Ground Saver evolved from UPS SurePost, a hybrid service where USPS handled final delivery. That partnership was paused in early 2025 amid USPS restructuring and cost concerns. But with new USPS leadership under Postmaster General David Steiner, both sides now see an opportunity for a “win-win-win” arrangement benefiting USPS, UPS, and customers alike.

UPS’s Ground Saver volume had plunged 32.7 percent year-over-year in Q3 2025, largely due to reduced Amazon deliveries and inefficient low-density routes that cost the company $85 million in the previous quarter. By re-partnering with USPS, UPS aims to regain parcel density and cut costs in its residential segment. While details remain under negotiation, the renewed partnership could reshape pricing and delivery models in 2026, especially for e-commerce shippers relying on affordable home delivery.

UPS will implement a general rate increase of 5.9 percent on December 22, 2025, affecting ground, air, and international services. However, the more significant impact for shippers may come from extensive surcharge adjustments that raise costs beyond the headline number.

Key changes include higher additional-handling fees, residential surcharges, and expanded delivery-area and remote-zone charges. For instance, the additional-handling surcharge for Zone 2 shipments will rise from $43.50 to $46.50, while the residential delivery surcharge increases from $6.10 to $6.50. These adjustments, combined with new ZIP-code classifications, will hit low-density and residential routes hardest.

The move mirrors similar pricing strategies from FedEx, reflecting an industry-wide effort to balance operational costs in a challenging parcel economy. Businesses that ship lightweight or long-zone e-commerce packages will likely face rate increases well above the 5.9 percent average.

To prepare, shippers should audit their shipping mix, optimize packaging sizes and weights, and revisit carrier contracts ahead of 2026. With base rates and surcharges rising in tandem, strategic planning now can protect margins later.