The Postal Service is counting on billions of dollars in upgrades to its aging delivery vehicle fleet and facilities to deliver mail and packages more quickly this holiday season.

USPS officials told reporters in a call Monday that a nationwide overhaul of its facilities will allow the agency to handle up to 60 million packages a day this holiday season, surpassing previous records.

This is also the first holiday season USPS will send some of its custom-built electric delivery vehicles out on delivery routes.

Its Next-Generation Delivery Vehicle (NGDV) has twice the cargo capacity of the  30-year-old USPS delivery trucks they’re replacing. Electric next-generation delivery vehicles will be on routes in Athens, Georgia, and Stockton, California.

USPS plans to spend $40 billion on capital investments throughout its 10-year Delivering for America plan. The agency spent more than $3 billion upgrading its facilites, IT systems, processing equipment and vehicle fleet in fiscal 2024. It expects to make capital investments worth $5 billion by the end of this fiscal year. That includes a mix of spending on new and ongoing initiatives.

USPS Chief Retail and Delivery Officer Joshua Colin said these investments mean the agency is “poised to perform even better than last year, even better than any holiday season in years past.”

“Thanks to the substantial progress we have made under the Delivering for America plan, we are confident [and] well-positioned to handle the peak season surge. Our ability to move packages and mail throughout our network has never been stronger,” Colin said Monday.

Despite these efforts, it remains unclear if USPS will see a higher volume of packages than it did last year.

“Obviously, we have the capability, the capacity, the additional equipment to process and deliver wherever the network is flexed. That will be based on consumer demands. We cannot predict that,” Colin said. “However, based on what we’ve seen in the past, we do expect from Thanksgiving on to see the volume come through the network.”

USPS reported a $9.5 billion net loss for fiscal 2024, despite year-over-year growth in revenue and a reduction in its controllable expenses. To get back on track with its financial goals, the agency is counting on expanding its competitive package business.

USPS is planning to permanently raise its package prices in January 2025, and is bringing back a temporary holiday surcharge this holiday season. The agency does not plan to raise mail prices in January, but does expect to raise rates in July 2025.

Colin, however, said USPS prices remain lower than its competitors, and that the agency is the “most affordable and reliable way to ship mail and packages this holiday season.”

USPS has opened 83 Sorting & Delivery Centers, which are large facilities that consolidate mail processing and delivery operations under one roof. The S&DCs are a mix of newly constructed and repurposed USPS facilities. Colin said the S&DCs will “provide faster and more reliable mail and package delivery over a greater geographical area.”

“Throughout Delivering for America investments, we have built capacity into our processing, logistics, and delivery infrastructure to meet our customers’ evolving needs,” he said.

USPS is also basing the rollout of electric vehicles around its new facilities, which include EV charging stations. The agency will have commercially available electric vehicles operating across 20 S&DCs in Georgia, Indiana, Texas, Pennsylvania, Oklahoma, California, New York, Illinois, Washington, and Virginia.

Colin said USPS will continue to roll out its new fleet over the next five years across the U.S., based on delivery volume, infrastructure readiness, and operational needs.

The agency, he added, is “committed to purchasing the most environmentally sustainable vehicles across the organization’s entire fleet.”

As part of its network changes, USPS is also delivering nearly all of its mail and package volume through its ground transportation network of trucks.

Colin said USPS pays air freight contractors to transport about 5% of its total mail and package volume. By curbing its reliance on air freight contractors, USPS has been able to save about $1 billion a year from its transportation costs.

“This allows for a reduction in our air freight dependency and streamlines transportation and processing operations,” Colin said.

USPS is looking to accelerate the pace of its network modernization changes next year. The agency agreed to put some of its network modernization plans on hold until at least January 2025, after it saw persistent mail delays in some areas where it opened new facilities.

“As we move through peak and move out of peak, at that point, we’ll start to put out schedules on moving forward with our modernization plans, and put out the details after we get through peak,” USPS Chief Customer and Marketing Officer Steve Monteith told reporters.

USPS has also been investing in its career workforce. The agency has converted about 190,000 pre-career employees to career positions. As a result, the agency is relying less on temporary seasonal hires this year.

Colin said USPS plans to hire 7,500 seasonal employees this year. Last year, it hired about 10,000 seasonal employees.

“Even though we’ve done conversions, there are times you’re going to be stretched on capacity,” Colin said. “So these 7,500 are strategically located throughout the entire country, where we feel we need the resources to keep the sites fluid and to be consistent with our Delivering for America plan. It’s still less than in prior years, but it’s strategically located throughout the country where we need them for this short period of time to get through peak.

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