Posted on 05/09/2026 4:34:26 AM PDT by Libloather
WASHINGTON, May 8 (Reuters) - The U.S. Postal Service on Friday reported a net quarterly loss of $2 billion as it faces a growing financial crisis and has warned it could run out of cash as soon as February.
USPS said mail volumes fell another 6.3% in the three months ending March 31 as operating revenue rose 2.3% to $20.2 billion over the same quarter last year.
USPS last month said it would temporarily suspend employer payments for a federal pension program to conserve cash and plans to raise the price of first-class mail stamps to 82 cents from 78 cents, effective July 12.
USPS has reported total net losses of $120 billion since 2007 as first-class mail, its most profitable product, has fallen to its lowest volume since the late 1960s. "We are in a cash crisis, and we are now taking serious and appropriate steps to conserve funds to operate," Postmaster General David Steiner said. "To avoid disruption and to sustain our role supporting American commerce and the public, we require urgent Congressional action to expand our borrowing authority and to address outdated constraints on the organization."
USPS's suspension of employee pension contributions will conserve $200 million in cash every two weeks, or $2.5 billion through September 30, it said.
Last month, USPS won approval from the Postal Regulatory Commission for a temporary 8% price hike for priority mail and package deliveries to deal with rising transportation and fuel costs. USPS plans for the surcharge to be in effect through January 17, 2027.
(Excerpt) Read more at reuters.com ...
I deliver mail. Most of you older freepers know this. The post office is allowing millions of unpaid packages to be delivered. It’s gotten to a point where our postmaster says deliver it anyway. There’s millions of bogus scan codes out there. People are allowed to print them at home, and hundreds of shipping companies, some not so legit. I am close to retirement so I don’t care anymore. If the postmaster general doesn’t fix this immediately, the post office will be out of business soon.
I would like to know how much it costs to deliver each of these items.
Political mail, non profits, junk mail all are pennies on the dollar in postage. Look at some of it. It will show 4, 9, maybe 12 cents. It still has to be handled, sorted, and handled again. Even your electric company gets a deal. Those 30 pieces of mail probably cost about 4 dollars total.
“It still has to be handled, sorted, and handled again.”
Machine printed. Machine sorted.
Total operating revenue of the USPS is about $80 billion.
They get about $6 billion in last mile delivery of packages for Amazon.
6 = about 7.5% of 80
It can’t be said from that that someone at USPS is getting wealthy by the contract with Amazon.
However, it can be said, by some financial estimates, that Amazon’s $6 billion may not cover all costs (including administration and overhead) for the roughly 1 billion items USPS delivers under their contract.
Why? The same reason Amazon wanted someone else to make many of those last-miles of its deliveries. Getting $6 billion to deliver about 1 billion items is like saying $6 dollars an item. In the dense cities and many suburbs $6 dollars may cover the costs, but not likely so in long low-population-density rural routes and those rural routes get about 40% of those 1 billion packages USPS does for Amazon.
What will it take for Amazon, Fedex, UPS and USPS to price their services by location, and thus by actual unit costs relative to location???
Right now, if USPS demanded much higher rates from Amazon, it’s likely Amazon would simply not renew the contract.
Then again, it is likely that a 1st class stamp is not paying 100% of actual costs for a 1st class letter either. Why? It’s like I said above, there are certain fixed costs to a definite and defined delivery route, regardless of the number of pieces in the mail bag. The mail bag may be lighter, and therefor represent less revenue, but most of the cost for the route is the same.
What’s needed is privatization of USPS, so that “overhead” costs can be vastly cut back with more efficient management and operations, so that revenues can more than make up for the many fixed costs of actual delivery routes - capital investment, labor, fuel, maintenance.
Yes, I included capital investment as a fixed cost, which it is in just about any transportation company. Planning on necessary periodic replacement of some types of equipment requires that annual budgeting (and cost vs revenue understanding) has to be done so that last minute (end of life) capital is already available, to a point, and borrowing for capital goods is reduced as much as possible. The more that planning is not done, the more debt-interest eats into the expected return on capital, and net profits. Instead, a sound company plans on replacement of certain portions of its equipment, annualizes the cost of accumulating the funds for it, and builds those numbers into the costs against which it wants to achieve net revenue/profit.
I worked at a non-profit where we did that. I anticipated that age of equipment and advancement of technology and advancement of systems would mean about 30% of our IT equipment would be in need of replacing each year. If we did not actually spend that much, we accumulated it in a special capital (invested) account, so that when actual equipment upgrades were needed the funds were there. I brought that budgeting system in from a major private company I worked for previously.
Most transportation companies have to do enough of that kind of budgeting and revenue expectations (to also cover some of the capital costs) or they wind up spinning out to much revenue to servicing interest on borrowing and leases; like what happened with Spirit Airlines.
(1) Military is a legitimate function of government.
(2) Private enterprise handles the citizens’ envelopes and parcels better than government. Government has proven it is a failure.
I would like to hear your disagreements in this matter, thank you.
USPS is the last mile on deliveries, you are correct. The Letter Carrier contract runs out in May, USPS Postmaster Generals have shifted money before every contract to show excessive loses during negotiations, but the Post Office is supposed to run at no profit. Raising costs on all services used to be a five year plan (surplus, smaller surplus, break even, small deficit, deficit), then raise prices again across the board. Letter Carriers receive usually .2%-.3% less than COLA. COLA 1.3% carriers receive 1%. Our last contract, with back pay raises and COLA was almost 2.3% less then accumulated COLA, 2023-2025 COLA. My take home pay was raised $52 every payday in 2026, my take home pay in November 2022 was $52 less. Around 2.6% take home pay increase since November 2022. My two cents.
The Postal Service cannot find stolen mail. We hear about those mailbox stands, where multiple homes get their mail, getting broken into by vagrants multiple times a year and that is just the ones near enough to hear about. Multiply that by the number of those that exist all around the country and also apartment mail stations and you can get an idea of how easy it is to lose mail.
A couple of stories: One night I was driving 80 from San Francisco to Sacramento and I kept seeing a bunch of paper flying around and felt bumpy things in the road under my wheels. It went on for quite a long way until I passed a semi truck pulled over by the side of the road with the back door open.
One evening my wife and I went for a walk and as we were walking up the street outside of our house, I saw some mail on the ground. I bent over to pick it up and my wife said don’t, it’s not your mail. I said nah and I picked it up and it was my mail, a check from my auto insurance company. I since put in a mailbox that can’t easily be stolen from.
The Post Office is mandated by the Constitution. Sames as the Army and Navy. If you want to privatize the PO, you’ll need to amend the Constitution.
It is a goal worth trying to achieve.
Presorted standard is the only junk mail that hasn’t got to be sorted but it still has to go through the machine to be sorted by route. The workers have to load it into the machine to be sorted by route. I then sort it to customer. I have a section of my route that is called raw mail. The machine sorts it to distric and the clerk sorts it to route. I then have to sort it to the customer.
Why? Removing a Constitutional function is prohibitively difficult. If you want to get rid of waste and inefficiency (and who doesn’t?), I think getting rid of the public sector unions is less work with more upside. And that would play across the entire government employment spectrum.
Exactly!! Very well put! Ending FedGov unions would improve operations across the entire government. The legislation* to do that though hard is not as hard as trying to get a Constitutional Amendment passed and ratified.
* Legislation is needed because LBJ codified JFK’s EO on allowing FedGov unions into law.
Government cannot help itself.
Just tinkering around the edges and getting rid of a union here or a union there is merely re-arranging the deck chairs on the titanic.
Government needs to be made actually smaller structurally. A few simple firings isn’t actually reducing the size and scope of government one bit. We need to reduce the actual size and reduce the actual scope.
So when you fire some unions, the next guy will just hire them back again or hire new ones. The cycle never ends rinse and repeat.
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