The Postal Service reported a net loss of $9 billion in fiscal year 2025 according to its annual financial results. Believe it or not, this is actually an improvement over the previous fiscal year in which it posted a net loss of $9.5 billion.
The decrease in net loss was attributed to an operating revenue increase of $916 million, transportation expense reductions of $422 million, and a decrease in workers’ compensation expense of $1.1 billion, partially offset by increased compensation and benefits expense of $1.7 billion, and higher other operating expenses of $221 million.
Total operating revenue for the year was $80.5 billion, a $916 million increase (1.2%) compared to the previous year. Total operating expenses for the year amounted to nearly $89.8 billion, representing a 0.4% increase from the previous year.
Other reported revenue figures were as follows:
- First-Class Mail revenue increased $370 million (1.5%)
- Marketing Mail revenue increased $350 million (2.3%)
- Shipping and Packages revenue increased $315 million (1%)
“In surveying the results of the past year, the occasional appearance of financial progress – such as our profitable first quarter – is far outweighed by the reality of our significant systemic annual revenue and cost imbalance,” said Postmaster General David Steiner. “To correct our financial imbalances, we must explore new revenue opportunities and public policy changes to improve our business model. Most importantly, we must operate more efficiently and compete more effectively to best perform our public service mission.”
USPS said it is seeking several administrative and legislative reforms to address what it feels are outdated and unnecessary financial and regulatory burdens that it is facing. These reforms include changes to the funding rules for the Civil Service Retirement System (CSRS) pension benefits, diversification of pension assets, raising the statutory debt ceiling, and reforms to workers’ compensation administration.
The Postal Service Reform Act became law three years ago, a law which USPS advocates had pushed for, in part because it eliminated the prefunding requirement for retiree health benefits. That change made the Postal Service happy and made advocates feel better, but the retirement costs still have to be paid for by the federal government.
As Senator Rick Scott (R-FL) noted at the time, “This bill doesn’t reduce costs — it just shifts them from one unfunded government program to another unfunded government program.”
But Senator Rob Portman (R-OH) said, “It’s not perfect, nothing is around here. But it’s a whole lot better than the alternative and it does get the postal service back on track again.”
In addition to the net losses of $9 billion in FY 2025 and $9.5 billion in FY 2024, the Postal Service reported a net loss of $6.5 billion in FY 2023 and an adjusted loss of $473 million in FY 2022, but that was because of the financial aid from the Postal Service Reform Act. Including financial aid from the Act gave USPS net income of $56 billion in FY 2022.
Even looking at what USPS calls controllable losses, which exclude certain expenses that are not controllable by management, the figures are equally dour: $2.7 billion in FY 2025, $1.8 billion in FY 2024, and $2.3 billion in FY 2023.
In light of these growing annual net losses, it does not appear that the Postal Service Reform Act has done much to improve the agency’s financial condition.
