The U.S. Postal Service is facing one of its most severe financial crises in decades, reporting a $9 billion loss for fiscal 2025. As mail volumes plummet and operational costs rise, the agency’s future—and the reliability of mail delivery for millions—hangs in the balance. With price hikes looming and calls for federal intervention growing louder, the stakes for households, businesses, and the national economy are higher than ever.
Mounting Losses and Shrinking Mail
The Postal Service’s $9 billion net loss this year marks a deepening of long-standing financial troubles. Mail volume dropped to 108.7 billion pieces, with First-Class Mail falling by 5% and package shipments declining by 5.7%. These categories are the agency’s main revenue sources, and their continued contraction has left USPS struggling to cover its costs.
This year’s results are among the worst in recent memory, reflecting a structural shift in how Americans communicate and do business. The rise of digital communication, online billing, and email has steadily eroded the volume of physical mail by an estimated 3–5% annually. Even as e-commerce has driven some growth in package deliveries, it has not been enough to offset the steep decline in letter mail.
Workforce and Service Under Pressure
USPS employs approximately 533,000 career workers and up to 635,000 total employees. The ongoing financial instability has created uncertainty for this vast workforce, raising the possibility of future restructuring and operational changes. Service reliability is also at risk, as the agency’s ability to maintain consistent delivery standards becomes more challenging under mounting deficits.
The Postal Service’s universal service mandate requires it to deliver to every address in the country—currently between 160 and 165 million. This obligation is especially critical for rural and low-income communities, which often lack affordable alternatives. As financial pressures intensify, these communities face the greatest risk of service disruptions or reduced access.
Uncontrollable Costs and Structural Challenges
A significant portion of USPS’s losses—over 80% this year—stems from pension obligations and workers’ compensation adjustments. These non-controllable costs limit the agency’s ability to stabilize its finances through operational changes alone. Meanwhile, aging infrastructure, a complex delivery network, and rising labor expenses continue to drive up operational costs.
Despite efforts to modernize and streamline operations, the Postal Service’s deficits have accumulated rapidly. Over the past three years, losses have exceeded $25 billion. The agency’s daily deficit now averages $24.7 million, underscoring the scale of the financial challenge.
Price Increases and Consumer Impact
In response to these mounting losses, USPS will implement shipping rate increases of 6–8% starting January 18, 2026. Priority Mail rates will rise by 6.6%, and Ground Advantage by 7.8%, while First-Class Mail stamp prices will remain unchanged. These price hikes are designed to help stabilize revenue, but they will also affect small businesses, online sellers, and households that rely on USPS for shipping.
For many, higher shipping costs may influence business decisions, profit margins, and delivery expectations. The increases highlight the broader consequences of the Postal Service’s financial struggles, as consumers and businesses alike adjust to a new reality.
Calls for Reform and the Road Ahead
Lawmakers and labor groups are urging Congress to enact legislative reforms, arguing that internal adjustments alone cannot resolve the agency’s deep-rooted challenges. Proposals focus on modernization, structural support, and relief from some of the financial obligations that have weighed down USPS for years.
Warnings about the agency’s future are becoming more urgent. Some projections suggest that, without significant intervention, USPS could face insolvency as soon as 2028. A federal bailout to cover the current deficit would cost roughly $27 per American, highlighting the stakes for taxpayers and policymakers.
As the Postal Service confronts these challenges, its ability to deliver critical mail and packages nationwide is at risk. The outcome will depend on whether policymakers can address the agency’s structural weaknesses and ensure its long-term sustainability. The decisions made in the coming years will shape the future of national mail delivery for generations to come.