The United States Postal Service (USPS) has launched a new package delivery option that the organization hopes will help it capture market share from United Parcel Service (UPS) and FedEx through providing efficient service and competitive rates.

Announced this week, Ground Advantage aims to deliver packages of up to 70 pounds in two to five business days across the continental United States without fuel surcharges or residential delivery surcharges. That compares to one-to-five-day delivery on packages of up to 150 pounds from UPS and FedEx.

With Ground Advantage, free package pickup at the home or office is part of the deal if the locations are situated along a driver’s delivery route. Business customers – including those in the promo industry – can use Ground Advantage as a return service for customers that need to send items back, USPS said.

There’s also $100 insurance included on USPS Ground Advantage and USPS Ground Return packages. Customers can buy up to $5,000 in additional coverage.

“USPS Ground Advantage is a game-changer – for our customers, the industry and USPS,” said Postmaster General Louis DeJoy in a statement. “By efficiently and effectively integrating our ground transportation model to the magnificence of our last-mile delivery operations…we are ready to compete for an increased share of the growing package business.”

In announcing Ground Advantage, the Postal Service asserted that its rates should prove competitive with rivals.

“We are pricing Ground Advantage to win customers,” said Jacqueline Krage Strako, executive vice president/chief commerce and business solutions officer at USPS. “In most cases, depending on the weight and distance, our rates will be attractive compared to the published rates of other carriers. And, because it has no residential surcharges, invoicing fees or add-ons like compounding fuel charges, customers can readily identify the comparative value of shipping with the Postal Service.”

USPS believes it can compete on service, too. According to Ship Matrix, USPS delivered 95.1% of packages on time in 2022. That compared to nearly 97% for UPS and 92.4% for FedEx.

With the launch of Ground Advantage, USPS is retiring three offerings: USPS Retail Ground, USPS Parcel Select Ground and USPS First-Class Package Service, as well as Ground Returns and First-Class Package Return Service

The focus on package delivery comes as the Postal Service’s business has changed amid declining letter/mail volume in the digital age. In the first quarter of 2023, mail still comprised 91% of the Postal Service’s delivery volume but just 51% of revenue. Packages were 6% of total volume but 39% of revenue. Speaking of letters/mail: The price on standard first-class stamps rose from 63 cents to 66 cents over the weekend.

The Postal Service’s stronger push into the package business is occurring as UPS and the Teamsters union that represents more than 340,000 of the company’s drivers and logistics employees have at least temporarily broken off negotiations for a new contract for the workers. While progress has been made, the talks have reportedly stalled on wages and benefits. A strike has been authorized to begin Aug. 1 if no deal is in place.