The general concept of UPS discounting their rates to be able to ship to USPS and let USPS deliver the pkgs based on zipcodes, to save UPS miles run, and gaining volume is a very flawed conception.
The basis of this concept is to reduce miles on rural routes and the opposite is occurring.
I have taken note of who I deliver to and who is going to get their pkgs via surepost/basic.
85% of them are going to the same people I deliver to daily at full cost service.
Gaining volume by reducing your profit margin by 50% is not a good business model.
On a weekly basis, I have to break off trace after delivering to a customer and drive 5 to 15 miles to a post office so that USPS can deliver a package the next day to the same damn customer I just left.
Now to the pkg size issue.
Just last week I had three boxes to delivery to a podunk post office-(literally the office is 15' by 17')- and those boxes were so big that they would only fit in the center isle of my P700.
The mail carrier drives a subcompact vehicle. No freaking way was I going to dump them at the P.O and say just deal with it.
I delivered them to the consignee and saved 10 miles by doing so.-( yes,I had permission, from above, to do so)-
So, IMHO, the only one that is gaining on the bottom line is the USPS.
At least that is the way it pans out in the rural areas.