First-class mail on-time rate hits 89% as USPS warns of looming funding crisis

The Postal Service is seeing an increase in revenue and mail pieces delivered after years of declining numbers. Postmaster General David Steiner told the USPS Board of Governors on Tuesday that amid increasing transportation costs and rising inflation the agency managed to keep controllable costs down as the agency rounds off the first month of fiscal 2027. Despite the positive outlook, Steiner doubled down on his previous call for congressional action regarding the agency’s long-term funding problem.

“The Postal Service is moving in the right direction and demonstrating the promise and potential of America’s oldest government agency. But as I’ve been saying in many venues, the Postal Service cannot be financially strong in the long term without fundamental changes to our legislatively dictated business model,” said Steiner. “We require congressional attention and we require action fast, as the uncontrollable costs of our retirement plans continue to create an untenable situation for our employees.”

Board of Governors Chairwoman Amber McReynolds also called on lawmakers to address both short-term and long-term funding solutions. McReynolds said at the meeting that allowing the agency to adopt private sector best practices for workers’ compensation claims could help address some of the financial tension. She added that Congress should increase the agency’s $15 billion borrowing limit from the Treasury Department, which has not changed since 1991.

“Ultimately, our fiscal cliff is here. The board continues to make uncomfortable default decisions, and we do not want to continue to operate in an unsustainable position as we have. Despite these challenges, postal workers continue to work tirelessly for the American people, and will continue to do so,” said McReynolds.

The financial future of USPS

USPS Chief Financial Officer Luke Grossman said the agency’s 2026 total revenue was $83.4 billion which is $2 billion more than 2025. The cost of employee compensation and benefits grew from $62.6 billion in 2025 to $63.2 billion in 2026. Grossman highlighted that the increase, which was due to cost-of-living-adjustments and general salary raises, is less than 1 percent and is below the inflation rate.

The Postal Service set a goal of $85.8 billion in revenue for fiscal 2027, approximately 2.9% increase from 2026. Grossman said USPS has also set a goal to reduce controllable losses by approximately $800 million.

“We are targeting no growth across our major line items except for salaries and benefits, which will be driven by COLAs and general increases that will outweigh the work-hour reductions. However, we are targeting an additional 9.2 million work-hour reduction in fiscal year 2027,” said Grossman.

Steiner said Congress has two choices to help the agency rebalance its budget: remove mandates and allow the agency to operate as a self-sufficient business or fund the mandates set in place by policy.

“If we remove the mandates, we could overcome our controllable losses in six months,” said Steiner.

Steiner added that the agency has taken initial steps over the past year to conserve its cash flow by deferring payments, stopping non-essential hiring and suspending employer contributions to the Federal Employee Retirement System.

Steiner said the agency will need to take other steps to improve its financial position, including closing post offices and changing service standards for non-first class and marketing mail if Congress doesn’t take action. He added he will have fully developed plans related to office closures and reduced delivery dates within the first quarter of calendar year 2027 to present to various government leaders.

“We will need to look at other areas to generate the cash we need to meet our obligations to our employees and to the American public,” said Steiner. “I will present those plans to leadership so they can make the policy choice between reduced levels of service or reform of our retirement plans and funding the money losing mandates.”

Delivery times improve, but not for all

Greg White, USPS network solutions and performance excellence vice president, said first-class mail on-time performance rate was 90.72%. This compares to 88.89% on time deliver during the fourth quarter of fiscal 2025. The average number of days to deliver first-class mail was 2.4 days, which is 0.1 day faster than the same period last year.

For the entirety of 2026, USPS delivered first-class mail 0.4 days faster than 2025. White said the agency delivered 89.03% of all first-class mail on time, compared to 83.15% in 2025. White added that USPS met the first-class mail composite target of 89% for the first time since 2022.

“As we continue into fiscal 2027, the Postal Service is ready to deliver the holidays. With an improved service baseline, increased capacities, enhanced network planning and new customer visibility projects underway, the Postal Service is ready to build on last year’s momentum,” said White.

White said USPS delivered 92.40% of overnight mail on time, and saw on time delivery rates for two-day first-class mail and three-to-five day first-class mail increase from 87.17% and 85.33% to 88.92% and 88.79%, respectively.

During the public comment period, Marla Keithler — the mayor of a small town in Washington— asked the board to address a blind spot in the agency’s performance reporting. Keithler said White Salmon residents’ mail is counted as successfully delivered, but at the cost of paying to receive it.

“The Postal Service’s universal service obligation is a promise to the American public, including the smallest and most remote communities. That promise cannot be measured solely by how quickly mail arrives for those already being served,” said Keithler.

Mail-in voting rule remains on the table

The board of governors also touted the success of the Postal Services ability to deliver ballots and other election mail on time during the Nov. 3 mid-term election. Steiner said, “The USPS did exactly what we always do: we put our heads down and get the job done.”

American Postal Workers Union President Jonathan Smith urged the board to repeal the vote by mail rule the Postal Service approved in August. Smith said the Supreme Court September injunction provided temporary relief in the 2026 mid-terms, but the board needs to act in preparation for the 2028 Presidential election. He explained the rule could restrict the handling and delivery of mail ballots. Smith said mail-in ballots accounted for one third of the voting results from the mid-terms.

“The board of governors has the authority and the responsibility to act and act immediately by rescinding the rule permanently,” said Smith. “Our job as postal workers is to deliver the mail securely, reliably and on time. It is not our job to determine whether someone is eligible to vote or not. Postal workers should deliver ballots, not decide whose ballots gets delivered.”

At a press conference prior to the Board of Governors meeting, Smith said the rule would have created the federal ballot mail in portal. The portal would require voters to submit information before receiving federal ballots in the mail. Smith added that USPS IT employees working on the portal tested it eight weeks in a row prior to the election. The portal however failed testing.

“Even if the Supreme Court had not stopped the rule, we would not have been capable of doing what they were asking us to do,” said Smith.

Congressman James Walkinsaw (D-Va.) called on the board of governors to repeal the rule ahead of the 2028 presidential elections. Walkinsaw said the rule could further undermine the public’s trust in the Postal Service’s ability to deliver election mail.

“You have the opportunity today to repeal the rule and set things right on a more positive track, and that’s what we’re here today, urging. That’s what the American people want to see. They want to continue to exercise their right to vote in this democracy. Voting by mail is a safe, secure, convenient way for millions of Americans to do that,” said Walkinsaw at the press conference.

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