U.S. Postal Service Financial Struggles

By David Shepardson

WASHINGTON (Reuters) – The U.S. Postal Service (USPS) stated on Thursday that it must continue to cut costs and increase revenue to avoid a government bailout and financial collapse.

USPS reported a net loss of $9.5 billion for its fiscal year ending September 30, $3 billion more than the previous year, primarily due to a rise in non-cash workers’ compensation expenses. Total operating revenue was $79.5 billion, a 1.7% increase.

> "If we do nothing more, we remain on the path to either a government bailout or the end of this great organization as we know it," the Postal Service warned in its revised restructuring plan, noting its still-precarious financial condition.

Since 2007, USPS has accumulated losses exceeding $100 billion and is executing a 10-year restructuring plan announced in 2021, aiming to eliminate $160 billion in predicted losses. However, it now projects $80 billion in losses for this period and plans additional cuts to manage the deficit.

At a board meeting, Postmaster General Louis DeJoy expressed hope for a future that is "financially sustainable, competitive, and service-excellent."

First-class mail volume continues to decline, dropping 3.6% year-over-year to 44.3 billion pieces, and it has fallen 80% since 1997, reaching the lowest level since 1968.

Despite plans to cut costs, USPS has decided not to reduce its network of 31,000 retail locations. In September, USPS announced that it will not increase stamp prices in January for the first time in two years. Earlier, in July, the price of a first-class mail stamp was raised to 73 cents from 68 cents, marking a 36% increase since early 2019 when stamps cost 50 cents.

In 2022, President Joe Biden signed legislation providing USPS $50 billion in financial relief over ten years, and Congress also provided a $10 billion pandemic expenses loan that was later forgiven.