Nonetheless within the midst of a liquidity disaster, the U.S. Postal Service wants extra income and should elevate parcel costs even when which means dealing with fewer packages total.
“The outcomes this quarter present the sturdy leverage that pricing can have on outcomes, and pricing is one lever that we have now to make use of now to develop income,” stated Postmaster Normal and CEO David Steiner throughout the USPS Board of Governors open session on Aug. 7, 2026.
The Postal Service is a key last-mile package deal provider. This USPS picture reveals a number of Amazon Prime packages, which the company handles.
Income Development
The USPS reported $19.9 billion in working income for its third quarter ended June 30, up 6.1% from the identical interval final 12 months. Its web loss narrowed to $2.5 billion from $3.1 billion.
Transport and packages generated $8.25 billion in income throughout the quarter, a year-over-year enhance of $588 million or 7.7%. But package deal quantity declined by 55 million items, or 3.4%.
Thus the USPS made considerably extra income from fewer shipments.
Floor Benefit progress contributed to the rise, as did a brief transportation-related worth enhance carried out in April for some parcel providers. Comparatively greater costs are compensating for declining quantity.
“All the statistics and outcomes present that we have now but to cross the purpose that we must be altering our pricing technique, and that we have now extra worth [increases] to soak up {the marketplace}. It might be financially irresponsible of us not to take action,” Steiner stated.
This was additionally true for market segments the Postal Service dominates, corresponding to mail supply. First-Class Mail income, to proceed the instance, elevated 4.3% throughout the quarter although quantity fell 3.5%.
Costs
Regulation limits how aggressively the Postal Service can elevate costs for its monopoly mail merchandise. Nonetheless, the quasi-governmental company has significantly extra safety and suppleness than for-profit carriers within the business.
Throughout his remarks, Steiner in contrast USPS pricing to supply-and-demand at airways and grocery shops, the place companies modify costs to maximise monetary returns reasonably than merely attempting to promote the best attainable amount.
“Up to now, making use of these primary ideas has favored elevating costs although there was a modest lower in volumes,” Steiner stated, equating the USPS to non-public business, which operates underneath totally different guidelines.
Ecommerce Influence
For a few years, rising ecommerce package deal quantity seemed to be a technique — maybe the one means — for the Postal Service to offset the decline in First-Class Mail quantity and its related income.
In a way, many retailers thought so too. The USPS has been a beautiful provider for light-weight residential shipments and deliveries to areas the place non-public carriers could impose further charges, significantly for last-mile deliveries.
The idea was that packages stuffed vehicles, processing amenities, and supply routes that the USPS was legally required to keep up anyway. When you’ve got a submit workplace in even the tiniest of cities, why not embody ecommerce deliveries?
Steiner, nevertheless, factors out that maximizing parcel quantity, and even mail quantity, shouldn’t be essentially the identical as maximizing income.
Through the June 30 quarter, the USPS dealt with 55 million fewer packages whereas gathering $588 million extra from these shipments. From the Postal Service’s perspective, that was a positive commerce. And it creates a unique incentive that might impression ecommerce shippers.
On the one hand, the Postal Service nonetheless wants packages, however its newest outcomes present that it doesn’t essentially want extra of them at any worth. If the USPS can gather extra income whereas carrying fewer parcels, Steiner has made clear which final result he prefers.
For ecommerce retailers, this shift in perspective doesn’t make Floor Benefit or different USPS providers any much less enticing. It does recommend how the Postal Service may change.
Unsustainable Mannequin
Steiner additionally asserted that whereas the company wanted extra price-setting authority, even a income increase couldn’t repair a structurally unsustainable Postal Service.
“As issues stand, the Postal Service is anticipated to be self-sustaining whereas, on the identical time, fulfilling mandates which might be inherently unsustainable and don’t cowl their prices,” Steiner stated.
“We have to repair the enterprise mannequin that has produced the 17-year-long imbalance in prices and income — and that’s going to require Congressional involvement.”
Within the meantime, ecommerce retailers ought to assume that postal package deal charges may rise once more forward of the vacation peak.
