USPS lost $9 billion last year, and now your postage is at risk | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

You probably don’t think about the U.S. Postal Service until something goes wrong with your delivery or a package arrives late.

But the agency that delivers to more than 170 million addresses six days a week just posted a staggering financial loss. The red ink is deep enough to threaten the services you count on, from Saturday mail delivery to your neighborhood post office staying open.

Postmaster General David Steiner delivered a blunt warning to Congress in mid-March that should get your attention. His message was clear: Without intervention, the agency that handles your prescriptions, tax documents, and holiday packages could run out of cash within months.

The financial crisis did not appear overnight, but the consequences are approaching faster than most people realize. Here’s what’s happening, what Congress might do about it, and what it could mean for your daily life and finances.

A $9 billion loss, and the clock is ticking on USPS cash reserves

The Postal Service reported a net loss of $9 billion for fiscal year 2025, which ended September 30, bringing total losses to roughly $25 billion over the past three years, USPS reported. Total operating revenue reached $80.5 billion, but expenses surged to nearly $89.8 billion, leaving a gap that no amount of stamp price hikes has managed to close.

Steiner told a House Oversight subcommittee that at the current pace, USPS will be unable to pay its employees and vendors within 12 months. The agency could exhaust its funds as early as fall 2026 if it continues to meet all required obligations, NPR reported.

If USPS defaults on some pension payments to buy time, the deadline could stretch to roughly February 2027.

First-class mail is vanishing and taking USPS profits with it

The core problem is simple. Fewer people send letters, and digital communication has hollowed out USPS’s most profitable business. Mail volume has dropped roughly 50% over the past two decades, falling from about 220 billion pieces to around 110 billion annually, Steiner’s prepared testimony shows.

Shipping and packages, which many expected would offset the decline in mail, have not been a silver bullet, either. USPS delivered about 6.8 billion packages in fiscal 2025, down from 7.3 billion the year before, a 5.7% drop, Federal News Network reported.

UPS and FedEx each handle nearly 10 billion packages annually, dwarfing the Postal Service’s share of the competitive delivery market.

The decline in mail volume accelerated sharply after the 2008 financial crisis, when businesses slashed advertising budgets, and consumers embraced online bill pay. Revenue from first-class mail, which has always been the agency’s highest-margin product, cannot be replaced by junk mail or marketing flyers that generate far lower returns per piece.

Your stamp costs 78 cents, but USPS says that’s still too cheap

A first-class Forever stamp currently costs 78 cents, up from 73 cents after a 5-cent increase in July 2025. That price has risen 56% since 2019, when a stamp was just 50 cents. Yet Steiner argued to lawmakers that U.S. postage remains the cheapest in the industrialized world.

A first-class stamp in France costs about $1.76, while the equivalent in the United Kingdom runs roughly $2.25, Steiner told the committee. Those countries span distances far smaller than those of the continental United States, making the comparison even more striking in the Postal Service’s case.

Recent stamp price increases at a glance:

January 2023: 63 cents
July 2023: 66 cents
January 2024: 68 cents
July 2024: 73 cents
July 2025: 78 cents (current price)

USPS held off on a January 2026 stamp increase, but Steiner has signaled that mid-2026 and 2027 hikes are on the table. If Congress grants USPS broader pricing authority, you could see stamps cross the $1 mark within the next few years.

Saturday delivery and your local post office could be on the chopping block

Steiner laid out the trade-offs for lawmakers in stark terms. Cutting delivery from six days to five would save USPS roughly $3 billion per year, Fox Business reported. Closing smaller, less-trafficked post offices would trim another $840 million annually. Both options face fierce public and political resistance.

“In order to ensure our survival beyond the next year, we need to increase our borrowing capacity so that we don’t run out of cash… the failure to do this could lead to the end of the Postal Service as we know it now,” said Steiner.

The Postal Service Reform Act of 2022 currently requires six-day mail and package delivery. Changing that standard would require an act of Congress. Steiner told lawmakers he is open to a conversation about reduced services, but stressed that the status quo is not sustainable.

Potential USPS changes that would affect you directly:

The loss of Saturday mail delivery would delay prescriptions, bills, and time-sensitive documents by an extra day over the weekend.
Closures of rural and small-town post offices could force you to drive farther for in-person postal services and P.O. box access.
You may see higher shipping costs on packages through a proposed temporary 8% surcharge on Priority Mail and USPS Ground Advantage products.
Slower overall delivery timelines if staffing and route consolidations follow cost-cutting measures across the network.

Congress already bailed out USPS; lawmakers skeptical about doing it again

The 2022 Postal Service Reform Act was supposed to fix the agency’s finances. It eliminated a crippling requirement that USPS prepay decades of future retiree health benefits and wiped out roughly $57 billion in overdue obligations. The law saved USPS an estimated $107 billion in total costs and produced the agency’s only profitable fiscal year in two decades.

That single good year did not last. House Oversight Committee Chairman James Comer (R-Ky.) pushed back hard on Steiner’s request for more help. “Everything that you’re talking about today, we did five years ago,” Comer said during the hearing.

He questioned whether USPS has taken enough cost-cutting steps on its own before asking Congress for another rescue.

Labor costs dominate the USPS budget

Comer pointed out that roughly 80% of the Postal Service’s operating costs go to labor. He asked why USPS has not implemented a hiring freeze, noting that most federal agencies have already done so. Steiner responded that freezing hiring for mail carriers would directly reduce your mail delivery, a trade-off the agency is reluctant to make.

USPS is also pushing a new shipping surcharge to offset rising fuel costs

While waiting for Congress, USPS is not standing still on the revenue front. The agency recently proposed a temporary 8% surcharge on Priority Mail, Priority Mail Express, USPS Ground Advantage, and Parcel Select shipments, Newsweek reported.

The surcharge is designed to cover rising fuel and transportation expenses.

If approved, the increase would take effect April 26 and last through Jan. 17, 2027. First-Class Mail stamps would not be affected by this particular surcharge. For you, that means shipping a holiday gift or returning an online purchase through USPS would cost more this year.

USPS said this surcharge is less than one-third of what competitors such as FedEx and UPS charge for fuel alone. The agency is framing the move as a modest step compared to what the private market already demands from shippers.

USPS plans an 8% shipping surcharge to offset rising fuel costs, making package deliveries and returns more expensive for consumers.

EAKARAT BUANOI/Shutterstock

The $15 billion borrowing cap hasn’t changed since 1992

USPS has maxed out its $15 billion borrowing limit with the U.S. Treasury, a cap set more than 30 years ago. Steiner is asking Congress to raise that ceiling so the agency can continue investing in network improvements and modernized delivery infrastructure.

Without borrowing relief, USPS cannot take on new debt to fund the fleet upgrades, sorting facility improvements, and technology investments needed to compete with private carriers.

Steiner told lawmakers that the Postal Service’s recently redesigned delivery network can now compete with FedEx and UPS, but only with continued investment.

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USPS received $10 billion in pandemic relief funds when it warned of a similar cash crunch during the Covid crisis. That emergency funding kept operations running, but it was a one-time lifeline rather than a structural fix. The agency has been borrowing from the Treasury while deferring pension obligations to stay afloat since then.

Steiner is also pushing for reforms to the agency’s pension and retiree health benefit calculations. He wants Congress to allow USPS to invest its retirement funds in assets beyond Treasury bills, potentially generating higher returns and reducing the long-term funding gap.

Workers’ compensation reform is another priority, with the USPS Inspector General estimating the agency could have saved more than $692 million over two years by adopting private-sector best practices for managing claims.

How to prepare if USPS services shrink or costs rise further

You may not be able to control what Congress does, but you can take steps now to reduce the impact of potential USPS disruptions on your household finances and daily routines.

Practical steps worth considering in light of USPS service changes:

Switch bill payments and bank statements to electronic delivery if you have not already done so, reducing your reliance on first-class mail.
Stock up on Forever stamps at the current 78-cent price before the next mid-2026 increase takes effect, since Forever stamps never expire.
Compare USPS shipping rates with UPS, FedEx, and regional carriers before sending packages, especially as the proposed 8% surcharge nears approval.
Sign up for USPS Informed Delivery, a free service that emails you images of incoming mail each morning so you know what to expect.
If you run a small business that relies on USPS for shipping, explore backup carriers now rather than scrambling if delivery days are reduced.

USPS is also betting on last-mile shipping deals to generate new revenue

The Postal Service is not relying entirely on Congress for a rescue. USPS recently began accepting bids from large and small businesses for special shipping rates on its nationwide last-mile delivery network. The idea is to leverage USPS’s unmatched reach, since no private carrier delivers to every address in the country, to attract commercial shipping volume.

Some industry analysts warn that this strategy carries risk. If USPS aggressively undercuts competitors on pricing, it could push major shippers like Amazon to invest in their own delivery infrastructure rather than continue to rely on the Postal Service. That outcome would further destabilize an agency already operating on razor-thin margins, NPR noted.

What happens next for USPS depends on how Washington treats this

Kevin Kosar, a senior fellow at the American Enterprise Institute who studies postal policy, told NerdWallet that Congress may simply do nothing. Lawmakers have a crowded legislative agenda, and postal reform rarely generates the urgency needed to move quickly on Capitol Hill.

The Government Accountability Office has weighed in as well, noting that Congress must decide what level of postal service the nation actually requires and find a balanced way to pay for it. That conversation has been deferred for years, and USPS’s cash runway is now measured in months rather than years.

Amber McReynolds, who chairs the USPS Board of Governors, said in a February public meeting that “policymakers must act urgently to address the structural and statutory cost pressures that continue to weigh heavily on our financial future.” The urgency in that language reflects a real deadline that is approaching fast.

For you, the bottom line is straightforward. Whether through higher stamp prices, fewer delivery days, closed post offices, or some combination of all three, the way you interact with USPS is almost certainly going to change.

Preparing now gives you options. Waiting until the crisis hits does not.