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The United States Postal Service (USPS) on Friday reported a $9 billion net loss for fiscal year 2025, prompting the agency to renew calls for sweeping legislative and regulatory reforms aimed at stabilizing its long-term finances.
According to its year-end financial statement, the Postal Service generated $80.5 billion in revenue, a slight increase from the previous year, but continued to struggle with persistent declines in mail volume, rising labor costs, and structural financial obligations that executives say cannot be resolved without intervention from Congress.
Mail Declines Continue to Pressure Revenues
First-Class Mail and Marketing Mail — historically the agency’s most profitable products — both saw further volume declines in 2025, continuing a trend driven by digital communication and shifting customer behavior. Package volumes also dropped compared to last year, despite modest growth in shipping revenue.
USPS officials said the shift has created a deeper imbalance between the agency’s service obligations and its ability to fund operations through postal sales alone.
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Operating Costs Outpace Gains
Total operating expenses climbed to nearly $89.8 billion, driven largely by higher compensation and benefits. While the Postal Service reported cost reductions in transportation and workers’ compensation programs, these savings were outweighed by broader labor and operational pressures.
The agency also reported a $2.7 billion controllable loss — a key internal metric that excludes items outside management’s immediate control — up from $1.8 billion the prior year.
USPS Seeks Price Adjustments and Legislative Action
To counter rising costs, USPS has proposed price increases across several shipping categories beginning in 2026, including Priority Mail, Priority Mail Express, and USPS Ground Advantage. The price of a First-Class Mail stamp would remain unchanged under the current proposal.
Beyond rate adjustments, the agency is urging Congress to act on a series of reforms including:
- Changes to pension and retiree health benefit funding requirements
- Permission to diversify certain investment assets
- An increase in its statutory borrowing limit
- Updates to workers’ compensation administration
- Additional authority to modernize operations and pricing
Postal officials said these measures are needed to address what they describe as a “structural and unsustainable gap” between revenue and mandated service obligations.
Universal Service Commitment Adds Strain
USPS is legally required to deliver mail to more than 170 million addresses nationwide six days a week. As delivery points increase annually — even as mail volume shrinks — costs rise without corresponding revenue growth.
The agency receives no taxpayer funding for day-to-day operations, relying primarily on postage and service fees.
Outlook
Postal leadership warned that without action from Congress, losses are likely to continue. The agency has recorded more than $100 billion in cumulative losses since 2007.
Still, USPS says its modernization initiatives, price adjustments, and potential legislative fixes could help return the organization to financial stability over the coming years.