For 20 years the ecommerce trade has helped stabilize the U.S. Postal Service, however current monetary outcomes recommend bundle supply alone could not generate sufficient revenue to maintain the provider’s nationwide community.
The USPS reported a $2 billion loss for the second quarter of fiscal 2026, which ended March 31, whilst bundle income elevated 4.5% yr over yr. But dropping $2 billion is an enchancment over the identical quarter final yr, when it misplaced $3.3 billion.
It’s nonetheless clear that the USPS can’t meet congressionally mandated worth and repair necessities and break even.
“The Postal Service stays in a severe monetary disaster,” mentioned Postmaster Common David Steiner on the Could 8, 2026, USPS Board of Governors assembly. “The established order isn’t sustainable, and it will be irresponsible to fake in any other case.”
Structural Stress
The Postal Reorganization Act of 1970 created the trendy USPS, which started operations on July 1, 1971.
The reset adopted a nationwide postal strike and years of economic pressure that prompted President Nixon to declare a nationwide state of emergency.
In response, Congress reworked the previous Publish Workplace Division right into a self-financing group anticipated to function extra like a enterprise whereas nonetheless offering common service.
That construction created a pressure that is still right now.
The Postal Service should ship to greater than 170 million U.S. addresses six days per week, together with many rural and unprofitable routes. In contrast to UPS, FedEx, or Amazon Prime, the USPS can’t simply abandon costly supply factors or considerably scale back service obligations.
“Congress foresaw that the price of common service would doubtless be an excessive amount of for the Postal Service to cowl by itself. That’s the reason they licensed a public service reimbursement to partially offset the prices associated to our expensive mandates,” mentioned Steiner.
First-Class Mail
For many years, nonetheless, the system labored as a result of First-Class Mail generated huge quantity and powerful margins. Payments, financial institution statements, enterprise correspondence, and private letters flowed steadily by the community.
At its peak in 2001, the USPS dealt with roughly 104 billion gadgets of First-Class Mail for 209 million U.S. adults, a mean of 500 every.
By 2024, first-class quantity had fallen to 44.3 billion items whereas the U.S. grownup inhabitants grew to roughly 260 million, decreasing per-adult density to roughly 170.
But the Postal Service’s overhead didn’t shrink proportionally. Actually, “supply factors have elevated by tens of tens of millions, mail volumes have decreased by over 50 p.c,” for the reason that Nineteen Seventies, Steiner mentioned.
| Fiscal 12 months | First-Class Mail Income ($ Billions) |
First-Class Mail Quantity (Billions) |
Transport & Packages Income ($ Billions) | Transport & Packages Quantity (Billions) |
|---|---|---|---|---|
| 2015 | $28.2 | 62.4 | $14.9 | 4.5 |
| 2016 | $27.3 | 60.9 | $17.3 | 5.1 |
| 2017 | $25.6 | 58.7 | $19.5 | 5.7 |
| 2018 | $25 | 56.7 | $21.5 | 6.2 |
| 2019 | $24.4 | 54.9 | $22.8 | 6.2 |
| 2020 | $23.8 | 52.6 | $28.5 | 7.3 |
| 2021 | $23.3 | 50.7 | $32 | 7.6 |
| 2022 | $24 | 48.9 | $31.3 | 7.2 |
| 2023 | $24.6 | 46 | $31.6 | 7.1 |
| 2024 | $25.4 | 44.3 | $32.3 | 7.3 |
| 2025 | $25.8 | 42 | $32.6 | 6.8 |
Ecommerce Development
Ecommerce helped stabilize USPS amid the decline of conventional mail.
As Amazon, Walmart, and a military of ecommerce companies expanded, packages more and more stuffed USPS vehicles, processing facilities, and supply routes. Light-weight residential shipments grew to become particularly essential to these sellers as a result of USPS already maintained nationwide last-mile infrastructure.
This was very true throughout the pandemic when ecommerce grew to become normalized for a lot of American customers, fueling development for almost all carriers.
In fiscal 2021, for instance, 41.6% of the USPS’s complete income got here from “Transport and Packages,” in comparison with 30.2% from First-Class Mail. Six years earlier, in fiscal 2015, the share of income was 21.6% for parcels and 40.9% for First-Class Mail.
Thus the Postal Service has step by step advanced into one thing nearer to a parcel and logistics enterprise. It’s an “financial platform” on the middle of U.S. commerce, based on Steiner, who emphasised the company’s modernization efforts on the 2026 Nationwide Postal Discussion board on Could 5.
But issues persist.
| Fiscal 12 months | First-Class Mail % of Income |
Transport & Packages % of Income |
|---|---|---|
| 2015 | 40.90% | 21.60% |
| 2016 | 38.20% | 24.20% |
| 2017 | 36.80% | 28.00% |
| 2018 | 35.40% | 30.50% |
| 2019 | 34.30% | 32.10% |
| 2020 | 32.60% | 39.00% |
| 2021 | 30.20% | 41.60% |
| 2022 | 30.60% | 39.90% |
| 2023 | 31.50% | 40.40% |
| 2024 | 31.90% | 40.60% |
| 2025 | 32.00% | 40.50% |
USPS Subsequent Steps
Within the March 31 quarter, whereas the USPS’s bundle income elevated 4.5% yr over yr, quantity declined 1.4%.
The mixture of upper income from fewer packages could replicate a mature, slower-growth supply market whereby costs and operational effectivity drive revenue somewhat than amount.
In that atmosphere, the USPS faces important aggressive stress from partnerships and direct carriers, together with Amazon, UPS, FedEx, and quite a few gig-based supply networks.
Worth, supply velocity, reliability, and common six-day-a-week protection all contribute to the core pressure.
Steiner argues that the USPS can’t resolve its monetary issues solely by value reductions. As a substitute, he mentioned Congress should grant the USPS extra operational flexibility or subsidize common supply.
The primary choice may embrace closing unprofitable publish places of work and aggressively elevating costs, which Steiner addressed.
The second would deal with common mail service as a public obligation worthy of federal funding.
