The United States Postal Service has brought in financial restructuring experts to help navigate a deepening cash crisis that threatens the agency’s future operations, according to Postmaster General David Steiner.
In a recent interview, Steiner revealed that the mail service faces the possibility of depleting its funds as early as 2027, a timeline Reuters initially disclosed in December. The agency has accumulated approximately $120 billion in net losses since 2007, primarily due to declining first-class mail volumes that have dropped to levels not seen since the late 1960s.
The postal service has engaged Alvarez & Marsal, a consulting firm, for a short-term contract to assist with contingency planning across multiple scenarios, Steiner explained.
“We are out of cash in 12 months if we don’t do anything different,” Steiner stated Thursday. “I do not want to be in a position where we’re six weeks out from running out of cash, and we say, Oh heck, what are we going to do?”
On March 17, Steiner is scheduled to appear before the House of Representatives to discuss the postal service’s financial challenges. He plans to caution lawmakers that without substantial improvements, Americans might not receive Valentine’s Day cards in February 2027.
The postmaster general highlighted that mail delivery has decreased by 110 billion pieces annually compared to peak volumes from 15 years ago, representing a loss of $86 billion in potential revenue at today’s rates.
The postal service disclosed a $1.25 billion quarterly net loss last month. Agency officials have urged lawmakers to overhaul the Postal Service Civil Service Retirement System requirements, grant greater pricing flexibility, and raise the current $15 billion debt ceiling that was reached years ago.
“If we can’t get help from the outside, from either our regulator or from Congress on the debt limit — everything’s got to be on the table,” Steiner emphasized.
The postal chief advocates for increasing stamp prices beyond the current 78 cents for first-class mail, suggesting Americans would accept rates of 90 to 95 cents per letter, especially considering other countries charge $2 or more.
In January, the postal service introduced an online bidding system allowing companies to submit proposals for accessing its final-mile delivery network. This initiative opens more than 18,000 destination delivery units and local processing facilities nationwide to additional customers, potentially generating crucial revenue.
The agency provides delivery services to over 170 million addresses across the United States six days weekly, with the final mile representing the costliest segment of the delivery process. This last-mile challenge also creates significant expenses for companies including FedEx, UPS, and Amazon.
Congressional action in 2022 provided approximately $50 billion in financial assistance spread over ten years and mandated that future retirees participate in a government health insurance program.
The legislation removed the requirement for the postal service to prefund retiree health benefits for current and former employees over a 75-year period, an obligation that no private company or other federal agency faces. Steiner’s predecessor, Louis DeJoy, warned Congress in 2021 that the postal service was trapped in a “death spiral” without meaningful reforms.
