USPS Network Plan Includes Insourcing of Linehaul Work

USPS linehaul truck feature

A U.S. Postal Service plan to insource all line hauling of mail and parcels between hubs and local delivery units, which had been handled by contractors, will be completely phased in by 2025, according to a source with knowledge of meetings with USPS officials.

As part of the 10-year Delivering for America network overhaul plan, begun in 2021, contractors are being notified that their services are no longer required and will be handled instead by USPS employees and assets. The services included transport of mail and parcels from area hubs to local post offices for morning delivery, then picking up outbound mail in the afternoon for injection into the system.

“The Postal Service continues to move forward with its Delivering for America plan, which includes optimizing the postal network,” said USPS spokesperson Susan Brennan. “One aspect of optimization includes finding the best way to transport products from site to site. Some contract carrier companies we have contracted with will be affected.”

The USPS said in April its projected loss over the duration of Delivering for America had been cut from $160 billion to $70 billion, and affirmed it would reach break-even by 2030, despite $3 billion in inflation-driven cost increases since 2021. This year, the agency plans to open four new regional processing and distribution centers, in addition to one that opened last year. Since the plan was initiated, daily capacity has increased to 60 million pieces through installation of new processing machines, the USPS said.

Allie Hull, owner of Allie L. Hull Trucking in Hightown, VA, near the West Virgina border, said her business was started by her father and her uncle in 1936, and at one time had tractor-trailers and box trucks operating in 19 states in the eastern U.S. It had been a USPS contractor for more than 70 years. The most recent report from the U.S. Department of Transportation showed a clean inspection record for Allie L. Hull Trucking.

Hull said she received a notice last month that her contract will be terminated as of Sept. 15. The USPS contract represented the company’s entire operations.

Until last month, Hull’s business had four box trucks picking up mail and parcels from a USPS facility in Staunton, VA, which was fed from a regional operation in Richmond. Its employees then sorted and shipped loads from Staunton to local post offices in northern Augusta County and all of Bath County, VA, seven days a week. In the afternoon, the operation worked in reverse, delivering outbound mail from DDUs back to Staunton for processing.

“That company is gone,” Hull said of her business. “Some companies I know of still have (USPS) contracts so they’re hanging in there. Others have picked up work for Amazon and businesses like that. But I’m closing her down and retiring.”

Hull said she was told that the Richmond area was a pilot for the USPS’s plan to take over mail shipments that had been handled by contractors. She also heard from someone who had been in a meeting with Postmaster General Louis DeJoy that the switch from contractors to in-house transport will be completed by 2025. Word of the changes started coming down a year ago, Hull said.

“It’s a domino effect when a contractor is cut, not just the drivers but support staff like bookkeepers and dispatchers,” Hull said. “There are seven companies near me I’m aware of that lost all or part of their contracts, with 134 families affected.”

Last year, a Missouri trucking company filed for Chapter 7 bankruptcy protection after its linehaul contract with the USPS was terminated, according to FreightWaves. The publication reported that smaller USPS contractors have been squeezed since a 2019 plan that changed the way they were compensated.