Postal management projected USPS will once again be in the red in fiscal 2025. GEORGE FREY/AFP via Getty Images
USPS loses $9.5B in FY24 and says another red year is coming
Postal management remains committed to DeJoy's reforms, saying it is showing positive signs.
The U.S. Postal Service lost $9.5 billion in fiscal 2024 despite sweeping reform efforts aimed at improving the agency’s financial outlook, though its management team remains steadfast that its current course is the correct one.
Looking at only the parts of the operation that USPS leadership considers within its control, the Postal Service actually cut its losses slightly from $2.3 billion in fiscal 2023 to $1.8 billion in the most recent year. Still, the Postal Service turned a profit in the “controllable” part of its ledger in fiscal 2021 and only lost $500 million in fiscal 2022.
USPS officials attributed the bulk of its losses to retiree costs and inflation adjustments to workers compensation payments. Mail volume continued to slide, however, including by nearly 4% among its most popular First-Class mail offering.
Postal management projected USPS will once again be in the red in fiscal 2025, projecting a $6.9 billion overall loss and a $1.1 billion controllable loss. Postmaster General Louis DeJoy, whose 10-year Delivering for America plan serves as the foundation of the Postal Service’s operational and financial reform efforts, initially projected that USPS would begin breaking even by 2023. Despite the setbacks, he said his vision is the only one that can put the Postal Service on a sustainable path.
“I have complete confidence that in 2025 we’ll accomplish more meaningful progress as we accelerate our execution and refinement of the Delivering for America strategies,” DeJoy said at a board meeting on Thursday. “The DFA is the only comprehensive plan to rescue the U.S. Postal Service in the last 25 years.”
In addition to resuming plans to consolidate facilities and to allow mail to sit at facilities overnight, initiatives that were paused in the runup to the election, USPS in 2025 is planning to slow down delivery for some mail. DeJoy said that change will save $3.6 billion per year and emphasized he was attempting to “save the Postal Service for generations to come.”
The postmaster general’s proposals have faced bipartisan opposition and pushback from the Postal Regulatory Commission. One DeJoy skeptic, Anton Hajjar, who serves on the postal board, said the postmaster general has allayed his concerns.
“I was won over to his leadership, relentless hard work and vision of the changes that were necessary to save The Postal Service,” said Hajjar, who will step down from the board this year when his term expires. “I've heard lots of criticism of the DFA in my time on the board, but I have yet to hear a feasible alternative.”
The Senate Homeland Security and Governmental Affairs Committee heard testimony this week from three of President Biden’s nominees to fill vacancies on the board, though it has little time to act before the next Congress is seated. During Thursday’s meeting, the board named Amber McReynolds, a Biden nominee who has served since 2021, as its next chair.
USPS fell deeper in the red in fiscal 2024 despite twice increasing its prices in the year, angering its large-scale mailers who have argued the agency is further driving mail out of the system.
The Postal Service is targeting a 1% reduction in work hours and a 7% cut to transportation costs in fiscal 2025. It is hoping to grow revenue by about 3%.