<\/p>\n
For two decades the ecommerce industry has helped stabilize the U.S. Postal Service, but recent financial results suggest package delivery alone may not generate enough profit to sustain the carrier\u2019s nationwide network.<\/p>\n
The USPS reported <\/a>a $2 billion loss for the second quarter of fiscal 2026, which ended March 31, even as package revenue increased 4.5% year over year. Yet losing $2 billion is an improvement over the same quarter last year, when it lost $3.3 billion.<\/p>\n It is nonetheless clear that the USPS cannot meet congressionally mandated price and service requirements and break even.<\/p>\n \u201cThe Postal Service remains in a serious financial crisis,\u201d said<\/a> Postmaster General David Steiner at the May 8, 2026, USPS Board of Governors meeting. \u201cThe status quo is not sustainable, and it would be irresponsible to pretend otherwise.\u201d<\/p>\n The Postal Reorganization Act of 1970 created the modern USPS, which began operations on July 1, 1971.<\/p>\n The reset followed a nationwide postal strike and years of financial strain that prompted President Nixon to declare a national state of emergency.<\/p>\n In response, Congress transformed the old Post Office Department into a self-financing organization expected to operate more like a business while still providing universal service.<\/p>\n That structure created a tension that remains today.<\/p>\n The Postal Service must deliver to more than 170 million U.S. addresses six days a week, including many rural and unprofitable routes. Unlike UPS, FedEx, or Amazon Prime, the USPS cannot easily abandon expensive delivery points or significantly reduce service obligations.<\/p>\n \u201cCongress foresaw that the cost of universal service would likely be too much for the Postal Service to cover on its own. That is why they authorized a public service reimbursement to partially offset the costs related to our costly mandates,\u201d said Steiner.<\/p>\n For decades, however, the system worked because First-Class Mail generated enormous volume and strong margins. Bills, bank statements, business correspondence, and personal letters flowed steadily through the network.<\/p>\n At its peak in 2001, the USPS handled roughly 104 billion items of First-Class Mail for 209 million U.S. adults, an average of 500 each.<\/p>\n By 2024, first-class volume had fallen to 44.3 billion pieces while the U.S. adult population grew to roughly 260 million, reducing per-adult density to roughly 170.<\/p>\n Yet the Postal Service\u2019s overhead did not shrink proportionally. In fact, \u201cdelivery points have increased by tens of millions, mail volumes have decreased by over 50 percent,\u201d since the 1970s, Steiner said.<\/p>\nStructural Tension<\/h3>\n
First-Class Mail<\/h3>\n