Postal Service Lost $9 Billion in 2025

Reform is long overdue at America's mail carrier.

Photo by Liam Truong on Unsplash

A more accurate rewrite of the unofficial U.S. Postal Service (USPS) motto might be, “Through snow, rain, heat, and gloom, the agency seems bound for fiscal doom.” America’s mail carrier has lost about $100 billion since 2010, and there’s no sign the USPS’s losses will be stopping anytime soon. According to data released today by the agency, the USPS lost $9 billion in fiscal year 2025. This jaw-dropping total is somehow an improvement from last year’s loss of $9.5 billion. However, that improvement mostly has to do with actuarial values and fluctuations. Net expenses within the agency’s control actually increased from $1.8 billion to $2.7 billion, mainly driven by compensation and benefit growth.

No matter how much money the USPS loses, some will inevitably try to pin the blame elsewhere. For example, earlier this year, the left-wing Economic Policy Institute lamented that the 2006 Postal Accountability and Enhancement Act (PAEA) “imposed unreasonable costs on the Postal Service for retiree benefits that resulted in large transfers from the agency to federal coffers.” The truth is that, even when this retirement “prefunding” mandate was in place, everyday operating expenses still exceeded revenues. Because the Postal Service Reform Act of 2022 removed the prefunding mandate and foisted those costs onto taxpayers, the USPS can no longer hide behind PAEA.

If the USPS is truly serious about correcting course, there are three simple ways the agency could save $5 billion per year:

End Saturday Delivery (estimated annual savings: $2.6 billion)

The USPS currently delivers mail Monday through Saturday, along with Sundays for some packages. However, some have argued for switching to a five-day delivery system to decrease costs and improve worker morale. Agency leadership suggested this idea (with some wiggle room for weekend package deliveries) in its “Five-Year Business Plan” in 2013. They concluded that it would save $1.9 billion per year. That’s $2.6 billion after adjusting for inflation, which is about a third of the average USPS annual loss over the past couple of years.

In 2015, the Inspector General surveyed consumers on whether six days of delivery was worth it at various stamp price points. The watchdog found that a large majority of consumers favored five-day delivery at any price point over 50 cents. Now that the price of a first-class stamp is 78 cents and rapidly rising, it’s reasonable to think consumers prefer five days of delivery over six. While this idea would likely need lawmakers’ sign-off, it’s worth considering.

Hire Fewer Career Workers (estimated annual savings: $2 billion)

Most private delivery companies have a simple formula for keeping labor costs low. They have a stable base of career employees and then ramp up with tens of thousands of seasonal and part-time workers to respond to upticks in demand. Unfortunately, the USPS has not gotten the memo. Former Postmaster General Louis DeJoy gloated, “We converted 190,000 employees to full career status over the past 4 years, increasing our total career employees by approximately 28,000 employees.”

Given that USPS part-time or temporary employees cost far less than their career counterparts, these conversions are a significant budget-buster. A 2021 analysis by the Government Accountability Office estimates that the compensation gap is around $25 per hour, though this total shrinks to $8 per hour when comparing similar types of workers with similar experience. Even after controlling for these factors, the USPS saves nearly $2 billion per year by retaining 115,000 non-career workers. Doubling the proportion of non-career workers would likely double these annual savings.

Crack Down on Counterfeit Postage (estimated annual savings: $400 million)

The USPS has a substantial problem monitoring and preventing counterfeit postage. In April 2024, a California woman pled guilty to defrauding the USPS out of more than $150 million in counterfeit postage. And, according to a recent report by National Public Radio’s Manuela López Restrepo, “Customs and Border Protection agents in Chicago seized nearly 162,000 counterfeit U.S. Forever stamps [in February], shipped from China. … had they been real, [they] would have been worth over $118,000.”

The estimated market worldwide for counterfeit postage is $500 million per year, and the U.S. likely accounts for a majority of that figure. The U.K.’s Royal Mail has been able to reduce fake stamp circulation by more than 90 percent by consistently barcoding stamps, and there’s no reason why the USPS can’t do the same.