The Postal Service is reporting a deeper financial loss than it’s seen in recent years, and is calling on Congress and the incoming Trump administration to address rising costs that are beyond its control.  

USPS reported a $9.5 billion net loss for fiscal 2024, despite year-over-year growth in revenue and a reduction in its controllable expenses. The agency saw a $6.5 billion loss in FY 2023.

USPS officials said 80% of the agency’s losses came from fixed costs — including pension contributions for its retirees and workers’ compensation claims for employees injured on the job.  

The agency will not seek to raise mail prices in January 2025, but it plans to keep setting higher prices each July and January after that, through the end of 2027.

USPS projections show the agency will end FY 2025 with a $6.9 billion net loss for FY 2025, and is falling short of its “break-even” goal under a 10-year reform plan.

The Postal Service’s growing annual losses have a downstream impact on its career workforce.

The leadership of the National Association of Letter Carriers recently told members that USPS’ growing net losses were a factor in negotiations for a three-year tentative labor agreement. Letter carriers will vote on the tentative deal later this month.

Postmaster General Louis DeJoy told the USPS Board of Governors that 2024 was a “year of continued transformation, accomplishment and setback” for the agency, including a mix of “successful endeavors and failed ones, attaining goals and falling short.”

“We are trying to accomplish what was presumed not accomplishable — the fixing of the broken Postal Service business model. We march on,” DeJoy said Thursday.

To get back on track with its financial goals, USPS is looking to earn $82.9 billion in revenue next year — a $2.4 billion increase from 2024. The agency expects nearly all of this revenue growth will come from expanding its package business.

USPS met bipartisan pushback from Congress this year over its network modernization plans.

The agency opened its first wave of regional mail processing mega-centers, called Regional Processing and Distribution Centers (RPDCs), but saw persistent declines in on-time delivery in some locations — including Atlanta, Houston and Richmond, Virginia.

USPS delivered about 86% of first-class mail on time in FY 2024, according to its service performance dashboard — down from 91% the year prior.

USPS has agreed to put some of its network modernization plans on hold at least until January 2025.

DeJoy said growth and cost-cutting are at the heart of the agency’s 10-year Delivering for America plan, but added the strategy “is not about contraction or just cost reduction.”

“That approach would not support our long-term goal of viability. It has been tried and it has failed,” he said.

DeJoy acknowledged USPS has fallen short on some of its goals, but he said the 10-year plan “is the only comprehensive plan” to save the agency from financial collapse.

“I have complete confidence that in 2025, we’ll accomplish more meaningful progress as we accelerate our execution and refinement of the Delivering for America strategies,” he added.

Next year, USPS expects to implement its plan to save billions of dollars annually by getting mail and packages to their destination in fewer trips between mail processing plants and post offices.

Under its Regional Transportation Optimization (RTO) initiative, mail and packages in more rural areas would remain in transit for about a day longer before reaching their final destination.

“We will reform legacy business rules that are no longer tailored to today’s volume and product mix, and that force USPS to make costly, expensive and inefficient actions, such as executing a trip in the morning and another trip in the evening, every day to every office, no matter how far that office is from the processing plant, or how much mail there is to pick up,” DeJoy said.

USPS told its regulator that the plan is a “net positive” for its customers. It expects about 14% of first-class mail will move faster under this plan, but 11% of mail will move slower.  About 75% would be unaffected by these changes.

DeJoy said this effort could save USPS up to $3.7 billion annually, and is essential to USPS to remain “financially self-sufficient while continuing to deliver to every address across the nation.”

“I will emphasize this is not an initiative to slow down the mail for rural America, close post offices or pursue draconian cost cuts,” DeJoy said. “This is a rationalized and methodical initiative to save the Postal Service for generations to come.”

USPS is still finalizing its election mail metrics, but DeJoy said preliminary data shows the agency delivered more than 98% of ballots from voters to election boards within its one-to-five-day delivery standard — and that ballots were delivered, on average, in less than a day. USPS, he added, delivered about 99% of ballots within seven days.  

While USPS deploys “extraordinary measures” each election to prioritize the delivery of ballots over regular mail, DeJoy said the agency’s performance demonstrates it is ready to handle a surge of mail and packages during this year’s peak holiday season.

“Just as with your vote, you can count on us to deliver holiday packages and mail throughout the nation,” DeJoy said.

Members of the USPS Board of Governors remain committed to the 10-year reform plan. In a recent closed-door session, the board approved a “Delivering for America 2.0” strategic plan for the next five years.

USPS under the strategic plan is asking Congress to raise its $15 billion borrowing limit with the Treasury Department to keep making infrastructure upgrades. 

The agency is also calling on the Office of Personnel Management to reassess what it pays into the Civil Service Retirement System, the pension system for federal employees who began government service before 1987.

Retiring board member Anton Hajjar, a former general counsel for the American Postal Workers Union, said that when he was nominated by President Joe Biden to serve on the board in 2020, “all the talk was that it was a priority to ouster Postmaster General Louis DeJoy.”

“I was won over to his leadership, relentless hard work and vision of the changes that were necessary to save the Postal Service,” Hajjar said.

USPS performance, he added, “has sometimes been spotty as the network is being transformed,” and urged USPS to conduct community tours in areas impacted by its network modernization efforts.

“People trust and cherish the Postal Service,” Hajjar said. “I’m convinced from my own experience talking to people that they are forgiving about the problems they have encountered when they get honest answers about why they are experiencing problems and what the Postal Service is doing to try and address them.”

“I have heard lots of criticism with the DFA in my time on the board, but I have yet to hear a feasible alternative,” he added.

Board member Dan Tangherlini, a former head of the General Services Administration, said USPS is not realizing its break-even goals, “but we are assured by the management team that we are in transition in the right direction.”

“There are many hopeful signs to suggest that progress, in fact, is being made,” Tangherlini said.

Transportation costs,  he added are lower, and that USPS efforts to insource previously contracted logistics operations and restructure its facilities “are showing positive results.”  

Ron Stroman, a member of the board and former deputy postmaster general, said USPS, in addition to its financial woes, remains far off from its goals of 95% on-time mail delivery. He urged USPS to “continue to make improvements and progress to improve service to the American people.”

“It would certainly appear that the Postal Service is headed to some challenging times over the next few years,” Stroman said.

Board Chairman Roman Martinez IV is also nearing the end of his term. His term expires on Dec. 8, but he can continue to serve on the board for an additional holdover year, or until the Senate confirms his successor.

The Senate Homeland Security and Governmental Affairs Committee held a hearing Thursday for three of President Joe Biden’s picks to serve on the board. In addition to filling Hajjar and Martinez’s seats, the board has two vacancies.

Amber McReynolds, the current head of the board’s election mail committee, will serve as board chairwoman starting next month. Derek Kan, a former deputy director of the Office of Management and Budget and Transportation Department undersecretary, will serve as the board’s vice chairman.

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