USPS Reports $9.5 Billion Loss in FY24, Projects Another Deficit in FY25

The U.S. Postal Service (USPS) has reported a significant financial setback, losing $9.5 billion in fiscal year 2024, which ended on September 30. This loss is $3 billion more than the previous year, despite ongoing reform efforts aimed at improving the agency’s financial health.

The bulk of the losses were attributed to retiree costs and inflation adjustments to workers’ compensation payments. Additionally, mail volume continued to decline, with a nearly 4% drop in First-Class mail, one of the Postal Service’s most popular services.

Despite these challenges, USPS management remains committed to Postmaster General Louis DeJoy‘s 10-year “Delivering for America” plan. This plan, which was initially expected to help the USPS break even by 2023, has faced bipartisan opposition and criticism from the Postal Regulatory Commission. However, DeJoy and other supporters argue that the plan is essential for putting the Postal Service on a sustainable path.

In fiscal 2025, the USPS projects another significant loss, estimating a $6.9 billion overall deficit and a $1.1 billion controllable loss. To mitigate these losses, the Postal Service plans to implement several cost-cutting measures, including consolidating facilities, allowing mail to sit at facilities overnight, and slowing down delivery for some mail services. These changes are expected to save approximately $3.6 billion per year.

The USPS also aims to reduce work hours by 1% and cut transportation costs by 7% in fiscal 2025, while hoping to increase revenue by about 3%. These efforts come after the agency increased its prices twice in fiscal 2024, a move that has been criticized by large-scale mailers who argue it drives mail out of the system.

Amid these financial challenges, the USPS board has named Amber McReynolds, a Biden nominee who has served since 2021, as its next chair. The Senate Homeland Security and Governmental Affairs Committee recently heard testimony from three of President Biden’s nominees to fill vacancies on the board.