What the Postal Service Cannot Stop Losing — and Why It Keeps Running
The USPS employs 640,000 people and generates $80.5 billion in revenue while posting annual losses. What the gap between scale and solvency reveals about universal service.
The United States Postal Service employs approximately 640,000 people. Only the Department of Defense employs more. It operates roughly 33,700 post offices — more retail locations than Subway or McDonald’s. In fiscal year 2024, it generated $80.5 billion in revenue, comparable to FedEx ($87.9 billion) and UPS ($88.7 billion).
It has also posted a net loss every year since 2007.
The scale makes the losses harder to dismiss as a failing organization winding down. The USPS is not small or marginal. It is one of the largest employers and revenue generators in the country, operating an infrastructure that reaches every address in the United States six days a week at uniform prices. The question is not whether it matters. It is whether its legal obligations are compatible with its financial reality.
What the numbers show
The USPS reported $80.5 billion in revenue for fiscal year 2024 against a net loss of $9.5 billion. The previous year, revenue was $79.32 billion with a $6.48 billion loss. These figures come from the agency’s own financial reports filed with the Government Accountability Office.
The losses are not new. They trace to a structural shift that began over two decades ago. First-class mail volume — the backbone of USPS revenue — peaked at 103.65 billion pieces in 2001. By 2020, it had fallen to 52.62 billion: roughly half. Email, messaging apps, and electronic billing replaced physical letters for most routine communication. The USPS could not reduce its cost structure proportionally, because the infrastructure that delivers mail to every address does not scale down cleanly.
Package volume has grown, but not enough to offset the letter decline. The USPS competes with FedEx and UPS in package delivery, but it faces a constraint those carriers do not: a universal service obligation.
The obligation private carriers do not have
The USPS is legally required to deliver mail six days a week to every address in the United States at uniform prices. A letter costs the same to mail whether it goes to Manhattan or rural Alaska. Private carriers charge by distance, weight, speed, and accessibility. They can decline unprofitable routes. The USPS cannot.
This obligation is not theoretical. It means maintaining sorting facilities, delivery routes, and post offices in areas where the cost per delivery far exceeds what first-class postage covers. It also means the agency cannot respond to declining volume by simply closing routes or raising prices selectively — the two levers a private company would use first.
The universal service obligation was codified into law and reinforced by the Postal Service Reform Act of 2022, which mandated six-day-a-week delivery. That same act addressed another structural burden: it eliminated the requirement that USPS pre-fund retiree health benefits for 75 years into the future, a mandate imposed by the 2006 Postal Accountability and Enhancement Act that had cost the agency approximately $5.5 billion annually in required set-asides.
The 2022 reform removed a forward-looking accounting requirement. It did not resolve the backward-looking reality: first-class mail volume has not recovered, and the cost of universal delivery has not declined proportionally.
The borrowing problem
The USPS borrows from the Treasury under authority granted by 39 U.S.C. § 201. In April 2020, Congress approved a $10 billion loan to help the agency respond to pandemic-related disruptions. That loan was forgiven in December 2020.
According to analysis published by the Brookings Institution in August 2026, the USPS has since hit its statutory borrowing limit again. Leadership has warned the agency could be “out of cash within the year” without extraordinary measures. The Brookings analysis — by Elena Patel and Jaxson Shealy — notes that the agency serves 700,000 retirees in addition to its active workforce, compounding the financial pressure.
The borrowing cycle is structural. When revenue falls short of operating costs, the agency draws on Treasury credit to maintain operations. When the limit is reached, it cannot borrow further without congressional action. The result is a recurring cycle: operate at a loss, borrow to cover the gap, hit the limit, seek legislative relief.
The interdependence no one talks about
The USPS’s financial strain exists alongside a practical reality: private carriers depend on it. UPS uses USPS for last-mile delivery of lighter packages through programs like UPS Ground Saver (packages under 10 pounds) and UPS Mail Innovations (packages under 1 pound). FedEx has operated similar arrangements. The scale of these partnerships runs into the millions of deliveries daily.
Private carriers outsource the most cost-sensitive segment of their operation — last-mile residential delivery — to an agency that cannot price that service to cover its costs. The arrangement is economically rational for the private carrier and politically invisible to most consumers. It also means the USPS’s infrastructure subsidizes the logistics networks of its competitors.
Why privatization has not happened
The Trump administration proposed privatizing the USPS during its first term. The proposal faced bipartisan opposition and did not advance. The arguments against privatization are not purely sentimental. A private carrier would likely reduce service to rural areas, raise prices for low-volume routes, and eliminate six-day delivery — outcomes the universal service obligation was designed to prevent.
The counterargument is that the current model is unsustainable. Annual losses in the range of $6 to $9 billion are not a temporary cycle. They are the arithmetic result of a cost structure built for higher volume operating at half that volume, constrained from adjusting prices or routes to match.
Both positions contain verifiable claims. Privatization would likely reduce losses by cutting service. Maintaining universal service requires either higher prices, lower costs, or ongoing subsidies — or some combination of all three. The USPS has pursued price increases (first-class postage rose to 78 cents in July 2025, with an increase to 82 cents planned for July 2026) and cost reductions through automation and facility consolidation. Neither has been sufficient to close the gap.
What the workforce composition adds
The USPS workforce is nearly 30 percent Black, according to Brookings analysis — double the share of Black workers in the national labor force. The agency offers health and retirement benefits that exceed what many private employers provide. Union contracts negotiated after a 1970 strike established wage and benefit structures that are costly but also represent one of the largest sources of stable, unionized employment in the country.
This demographic and economic context is not incidental to the policy debate. Any restructuring of the USPS — whether through privatization, service reduction, or subsidy reform — would disproportionately affect Black workers and would eliminate a major source of middle-class employment in communities where few comparable employers exist. The financial arithmetic and the social arithmetic do not point in the same direction.
What remains unresolved
The USPS is not a company that lost its way. It is an institution whose legal mandate requires it to do things no private company would do, at prices that do not cover the cost of those things, with a revenue base that has been cut in half since the obligation was last meaningfully renegotiated.
The 2022 Reform Act removed one structural burden — the retiree pre-funding mandate — but left the core tension intact: universal delivery at uniform prices, funded by postage stamps and package fees, with a borrowing limit that resets the crisis on a cycle rather than resolving it.
A private carrier can price for profitability. A public institution can subsidize for equity. The USPS is neither purely one nor the other. It is a hybrid that generates more revenue than most Fortune 500 companies while losing money every year, serving every address while borrowing to stay open, and employing more people than any organization except the military — all under a legal framework that was last updated comprehensively for a world where letters, not packages, were the primary product.
The question is not whether the Postal Service should exist. It already does, at a scale that makes it one of the largest organizations in the country. The question is what kind of institution it is supposed to be, and whether the current arrangement — too commercial to qualify for direct subsidies, too public to operate like a company — can persist without either a meaningful price adjustment, a redefined service obligation, or an explicit subsidy that acknowledges what the uniform pricing already conceals.