Nonetheless within the midst of a liquidity disaster, the U.S. Postal Service wants extra income and will elevate parcel costs even when meaning dealing with fewer packages general.
“The outcomes this quarter present the robust leverage that pricing can have on outcomes, and pricing is one lever that now we have to make use of now to develop income,” mentioned Postmaster Basic and CEO David Steiner through the USPS Board of Governors open session on Aug. 7, 2026.
The Postal Service is a key last-mile package deal provider. This USPS photograph reveals a number of Amazon Prime packages, which the company handles.
Income Development
The USPS reported $19.9 billion in working income for its third quarter ended June 30, up 6.1% from the identical interval final 12 months. Its internet loss narrowed to $2.5 billion from $3.1 billion.
Delivery and packages generated $8.25 billion in income through the quarter, a year-over-year improve of $588 million or 7.7%. But package deal quantity declined by 55 million items, or 3.4%.
Thus the USPS made considerably extra income from fewer shipments.
Floor Benefit development contributed to the rise, as did a brief transportation-related worth improve applied in April for some parcel companies. Comparatively larger costs are compensating for declining quantity.
“The entire statistics and outcomes present that now we have but to cross the purpose that we needs to be altering our pricing technique, and that now we have extra worth [increases] to soak up {the marketplace}. It might be financially irresponsible of us not to take action,” Steiner mentioned.
This was additionally true for market segments the Postal Service dominates, similar to mail supply. First-Class Mail income, to proceed the instance, elevated 4.3% through the quarter despite the fact that quantity fell 3.5%.
Costs
Regulation limits how aggressively the Postal Service can elevate costs for its monopoly mail merchandise. Nonetheless, the quasi-governmental company has significantly extra safety and suppleness than for-profit carriers within the business.
Throughout his remarks, Steiner in contrast USPS pricing to supply-and-demand at airways and grocery shops, the place companies modify costs to maximise monetary returns somewhat than merely making an attempt to promote the best doable amount.
“To this point, making use of these fundamental rules has favored elevating costs despite the fact that there was a modest lower in volumes,” Steiner mentioned, equating the USPS to non-public business, which operates underneath completely different guidelines.
Ecommerce Impression
For a few years, rising ecommerce package deal quantity gave the impression to be a technique — maybe the one method — for the Postal Service to offset the decline in First-Class Mail quantity and its related income.
In a way, many retailers thought so too. The USPS has been a pretty provider for light-weight residential shipments and deliveries to areas the place personal carriers could impose further charges, significantly for last-mile deliveries.
The speculation was that packages stuffed vehicles, processing amenities, and supply routes that the USPS was legally required to keep up anyway. You probably have a submit workplace in even the tiniest of cities, why not embrace ecommerce deliveries?
Steiner, nevertheless, factors out that maximizing parcel quantity, and even mail quantity, isn’t essentially the identical as maximizing income.
Throughout the June 30 quarter, the USPS dealt with 55 million fewer packages whereas accumulating $588 million extra from these shipments. From the Postal Service’s perspective, that was a positive commerce. And it creates a unique incentive that would impression ecommerce shippers.
On the one hand, the Postal Service nonetheless wants packages, however its newest outcomes present that it doesn’t essentially want extra of them at any worth. If the USPS can acquire extra income whereas carrying fewer parcels, Steiner has made clear which final result he prefers.
For ecommerce retailers, this shift in perspective doesn’t make Floor Benefit or different USPS companies any much less enticing. It does counsel how the Postal Service might change.
Unsustainable Mannequin
Steiner additionally asserted that whereas the company wanted extra price-setting authority, even a income increase couldn’t repair a structurally unsustainable Postal Service.
“As issues stand, the Postal Service is predicted to be self-sustaining whereas, on the identical time, fulfilling mandates which are inherently unsustainable and don’t cowl their prices,” Steiner mentioned.
“We have to repair the enterprise mannequin that has produced the 17-year-long imbalance in prices and income — and that’s going to require Congressional involvement.”
Within the meantime, ecommerce retailers ought to assume that postal package deal charges might rise once more forward of the vacation peak.
