USPS turns a profit during busy season as DeJoy says his reforms are taking hold

The U.S. Postal Service turned a profit of $144 million during its busiest season of the year, operating in the black for the first time since the height of the COVID-19 pandemic. 

Postmaster General Louis DeJoy celebrated the achievement and attributed the success to changes he has implemented to cut costs, bring in new business and make the postal network more efficient. The profitable first quarter of fiscal 2025—from Oct.1 through Dec. 31—marks a stark departure from the same period in fiscal 2024, when USPS lost $2 billion. 

“Our future is bright,” DeJoy said on Thursday. “We are on the right path. We can compete with the best. We can achieve financial solvency. And we can create a network that is integrated, modern, and performance based.”

USPS turned a net profit of nearly $1 billion in the most recent fiscal quarter when excluding expenses postal management deems outside of its control, compared to $472 million in the same period last year. Revenue jumped by 4% to $22.5 billion while the agency slashed $326 million in transportation expenses. Much of the turnaround—$1.8 billion worth—came from changes in the calculations of USPS’ workers’ compensation obligations. 

The revenue jump came despite ongoing volume losses, as USPS has continued to significantly raise its rates compared to historical norms. Money coming in from shipping and packages grew by 3% in the quarter while First-Class mail revenue increased by 4%. Marketing mail income climbed by 11%, largely driven by political and election mail. 

USPS is in the midst of implementing DeJoy’s Delivering for America plan, which is reorganizing the postal network, consolidating facilities and altering service standards. The postmaster general suggested new efforts to solicit business and consolidations of processing and sorting operations have contributed to the turnaround.

He added the agency’s “new approach to business” focused on “innovation and relevance” will further drive an improved financial outlook. DeJoy highlighted an initiative to deliver next-day packages within 300 miles as an important new revenue stream and suggested a new roster of executives and restructured organization would create new efficiencies. 

He also noted USPS will offer $15,000 buyouts to some mail handlers as an incentive for them to take early retirement packages. 

“This retirement incentive will allow us to right-size our staffing, culminating in a significant long-term cost benefit to the Postal Service,” DeJoy said. 

The postmaster general once again criticized those who object to his plan, including a bipartisan chorus of lawmakers, stakeholders and the Postal Regulatory Commission. PRC last week blasted DeJoy’s reform plans, suggesting they were poorly thought out and contained “little convincing evidence” they would succeed. 

DeJoy countered that the commissioners had argued, essentially, “that they are smart, and we are dumb.” He added his plan would bring about “service excellence.”

“That is a journey, especially in our poorly regulated, hypocritically political, and competitive economic environment we serve,” DeJoy said. “Other obstructions are the archaic, artificial, unreasonable, unachievable, and unnecessary service requirements, standards, and business rules.”

The turnaround in the most recent fiscal quarter, DeJoy said, proves that his plan can succeed. It was the first profitable quarter since the pandemic led to a significant boost in postal revenue in 2020 and one of only a few in the last decade. 

Still, DeJoy and postal management have cautioned they expect the Postal Service to once again lose billions of dollars in fiscal 2025. DeJoy initially projected USPS would be profitable by 2023.