Federal Postal Service advocates against establishment of ceiling on increased postal rates
USPS Seeks Flexibility in Pricing to Maintain Financial Sustainability
The United States Postal Service (USPS) is urging its regulator to allow it more flexibility in setting mail prices, citing the need for financial sustainability in the face of ongoing challenges affecting its business model.
The Postal Service, which is roughly halfway through its 10-year "Delivering for America" plan, posted a $3.1 billion net loss for the third quarter of fiscal 2025, greater than the $2.5 billion net loss from the same period last year. Despite growth in package revenue and a decrease in total work hours, the service is far from achieving its "break-even" financial goals, with a $6.2 billion net loss so far this fiscal year.
In a bid to boost revenue, the USPS has been implementing strategic pricing measures. Recent postage rate changes have included a 5-cent increase in First-Class Mail stamps effective July 2025, reflecting the need to offset volume declines and rising expenses. Temporary price increases for peak seasons are also part of this strategy, aiming to cover additional handling costs and maintain competitive practices.
The Board of Governors, led by Postmaster General Louis DeJoy, opposes any plan to privatize USPS. They emphasize that sustained revenue growth through pricing is crucial for aligning costs with revenue, enabling investments in better service and operational improvements. Governor Ron Stroman, a former deputy postmaster general, concurs, stating that it would be a mistake for the commission to override the board's pricing decisions.
Governor Dan Tangherlini supports USPS maintaining authority over pricing, while Governor Roman Martinez IV urged the White House to submit more nominees to serve on the USPS board. A proposed rule from the Postal Regulatory Commission, filed in June, would limit USPS to only raising prices once per year. However, the Board of Governors is urging its regulator not to put limits on its ability to set higher mail prices.
Anthony Lomangino, a waste and recycling executive, was nominated by President Donald Trump to serve on the USPS board, but his nomination was later withdrawn. Steiner, a recent addition to USPS, appreciates the vital role the Postal Service plays in binding the nation together. The service, which delivers more mail and packages than any other postal organization in the world, has been making connections between people and businesses for over 250 years.
Despite declining mail volume, USPS continues to see modest growth in mail revenue due to regular price increases in January and July. The service delivered more than 90% of first-class mail on time this quarter, with delivery taking about 2.6 days on average. Governor Steiner noted that USPS has the largest infrastructure footprint of any non-military institution.
In conclusion, the USPS is seeking pricing flexibility to maintain financial sustainability, improve service, and meet its public service mission amid economic and operational challenges. The Board of Governors is urging its regulator to avoid restricting rate increases to ensure the Postal Service can continue to provide reliable mail and package delivery nationwide.
- The Postal Service, aiming to align costs with revenue and invest in better service, has been advocating for flexibility in setting mail prices, as part of a strategy to reimagine and sustain its federal workforce's financial stability in the face of ongoing business challenges.
- To maintain financial sustainability and improve business operations, the USPS board has been urging its regulator to support pricing measures that enable the reimagined workforce to cover expenses, realize growth, and uphold competitive practices, ensuring the continuation of reliable mail and package delivery for the nation's workforce and businesses.
