The USPS Reports a $6.5 Billion Net Loss for FY 2026

Postal “self-help” is sorely lacking.

Photo by Towfiqu barbhuiya on Unsplash

Reading through the U.S. Postal Service’s (USPS’s) summary of its fiscal year (FY) 2026 financial performance, one would think the agency is doing a bang-up job. “Net loss decreased by $2.5 billion while controllable loss decreased by $344 million,” declares America’s mail carrier. There may be a financial crisis, but that’s “in spite of self-help efforts.”

Readers are required to scroll down to see what should be at the very top of the page. The USPS lost an astounding $6.5 billion in FY 2026, and the agency’s “self-help” sure isn’t amounting to much. Controllable loss—which refers to financial losses from expenses that USPS management considers within its control—“was $2.4 billion for the year, compared to controllable loss of $2.7 billion for the prior year.” The good news is that, once USPS leadership takes responsibility for the agency’s abysmal financial state, a few changes can go a long way toward getting the agency back into the black.

The USPS’s Office of Inspector General (OIG) said it best in a September report: “While there are numerous major cost centers in the Postal Service’s network, compensation and benefits is the largest.” The agency is bizarrely determined to increase the size of its career workforce, leading to “increased compensation expenses despite a reduction in workhours. Specifically, compensation expenses have increased by 3.5 percent since the beginning of FY 2024 through quarter 2 of FY 2026 despite the reduction of over 40 million (3.7 percent) workhours.” And while postal unions are powerful and play a key role in driving up costs, the USPS is permitted under existing agreements to hire far more pre-career employees, who have neither permanent status nor full employee benefits. The OIG explains that “[t]he number of pre-career employees the Postal Service can hire is capped at a percentage of career employees, generally between 15 to 25 percent within their craft ... but all crafts are below their negotiated pre-career cap.”

The USPS would save significant sums of money by shifting its workforce composition toward pre-career employees. 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 pre-career workers. Doubling the proportion of pre-career workers could significantly increase annual savings.

Yet, there is remarkably little indication that the USPS intends to pursue this path. The agency recently announced it is hiring just 10,000 seasonal workers, “down from 40,000 just a few years ago.” In contrast, Amazon and the United Parcel Service are respectively hiring 300,000 and 100,000 seasonal workers. Private shippers, who tend to have far lower percentages of career staff than the USPS, have a simple formula for success: temporarily ramp up hiring to meet surges in demand. If the USPS employed this strategy, rather than paying for the bloated benefits of an ever-increasing career workforce, maybe postal “self-help” would amount to something.

Instead, taxpayers and consumers continue to see multibillion-dollar net losses and an endless parade of excuses.