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01/08/2025
The USPS: A $9.5 Billion Deficit in 2024
Source: Jim Hamilton, Green Harbor Publications, December 16, 2024. Content provided by Canon Solutions America.
You may have seen the recent news that the United States Postal Service (USPS) had a deficit of $9.5 billion during its recently completed 2024 fiscal year. This is after Postmaster General Louis DeJoy suggested four years ago that his “Delivering for America” plan had a chance of getting the USPS to a breakeven point by now. As it turns out, though, this is not all DeJoy’s fault. In a very true sense, the USPS has its hands tied. The United States government does not see the postal service as a “service” provided to taxpayers—it wants the USPS to be self-funding, but in several important legislative ways, the government has made it very difficult for the USPS to break even.
Good News and Bad News
The good news from the latest USPS fiscal announcement was that the USPS increased its operating revenues by $1.4 billion, largely due to gains in package shipping. Even so, it still experienced a $9.5 billion net loss in its 2024 fiscal year. Of this $9.5 billion, the USPS considers only $1.8 billion of that deficit to be under its control. According to USPS management, the remaining $7.7 billion is “uncontrollable.” In other words, these losses are dependent on factors that are outside of USPS management's control. These losses are attributed to the amortization of unfunded retiree pension liabilities and non-cash workers' compensation adjustments. These are losses that, according to the USPS, can only be improved by legislative action.
Controlling the Uncontrollable
At the public meeting about its 2024 fiscal results, outgoing Chairman of the Postal Service Board of Governors Roman Martinez IV made the following points about uncontrollable costs:
“Simply put, the key premise of the [Delivering for America] plan is that the Postal Service cannot achieve its dual mandate mission with its historical business model and operating structure. To achieve its mission, the Postal Service needs to grow its package business to generate sufficient cash flow to cover operating costs, capital investments (both new and deferred), and other obligations. To meet that objective and to improve service overall, the Postal Service must restructure its nationwide network into a cost-effective, integrated mail and package logistics system and do so while handling almost 400 million pieces of mail and packages every day.”
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