Evolving Market Dynamics in Last-Mile Delivery and USPS’s Path Forward
The U.S. last-mile delivery landscape is undergoing a shift away from traditional carriers, including the U.S. Postal Service. For the first time in 2025, the Postal Service was not the nation’s largest parcel carrier by volume. In addition, “alternative” carriers captured almost 11 percent of parcel volume, nearly tripling their market share over the last five years.
This paper explores the characteristics and comparative advantages of emerging alternative carriers. It highlights their technologies, labor and pricing models, and external investments, and seeks to understand the impacts of the evolving last-mile market on the Postal Service.
Alternative carriers can offer flexible services at aggressive rates by utilizing asset-light business models powered by crowdsourced gig labor, automated sorting, and dynamic routing platforms powered by AI. At the same time, these low-cost operating models bring significant operational trade-offs and risks that have increasingly drawn legal and regulatory scrutiny.
As it navigates these evolving dynamics, USPS is working to strengthen its market position by expanding its commercial partnerships, seeking higher-margin parcels, and modernizing its operational infrastructure. The Postal Service also maintains key structural advantages, including its extensive geographic reach, universal service, and a vetted career workforce, which alternative providers cannot replicate.
Brooke Hobbie, Lauren Yeom, John Althen, and JP Ducasse contributed to this report.
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