USPS: To correct our financial imbalances, we must explore new revenue opportunities
The U.S. Postal Service today announced its financial results for the 2025 fiscal year ended September 30. Controllable loss, which excludes certain expenses that are not controllable by management, was $2.7 billion for the year, compared to $1.8 billion for the prior year.
Net loss for the year under generally accepted accounting principles (GAAP) totaled $9.0 billion, compared to a net loss of $9.5 billion for the prior year. This decrease in net loss is attributed to our 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.
“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.”
The Postal Service is seeking further administrative and legislative reforms to remedy outdated and unwarranted financial and regulatory burdens. These reforms include: changes in retiree pension benefit funding rules for the Civil Service Retirement System (CSRS) benefits, diversification of pension assets, raising the statutory debt ceiling, and workers’ compensation administration reform.
Total operating revenue was $80.5 billion for the year, an increase of $916 million, or 1.2 percent, compared to the prior year. The increase was due largely to continued growth of our USPS Ground Advantage shipping service as well as strategic price increases in both of our mail and shipping categories.
First-Class Mail revenue increased $370 million, or 1.5 percent, on a volume decline of 2.2 billion pieces, or 5.0 percent, compared to the prior year. Marketing Mail revenue increased $350 million, or 2.3 percent, on a volume decline of 764 million pieces, or 1.3 percent, compared to the prior year. Shipping and Packages revenue increased $315 million, or 1.0 percent, on a volume decline of 415 million pieces, or 5.7 percent, compared to the prior year.
Total operating expenses were nearly $89.8 billion for the year, an increase of $317 million, or 0.4 percent, compared to the prior year. The overall increase in operating expenses was primarily due to increases in compensation costs and other operating costs, including the incentivized voluntary early retirement offer to certain employees, partially offset by the impact of discount rates on workers’ compensation costs and lower transportation costs.
“The financial results reflect the difficulties of our mandated cost structure and the continued decline in volume, offset to some degree by the Postal Service’s efforts to push back against those trends by aggressively managing the costs we can control and by the judicious use of our pricing authority,” said Chief Financial Officer Luke Grossmann. “We remain focused on moving toward financial sustainability through growing our USPS Ground Advantage package business, creating additional operational efficiencies, and developing product strategies to generate growth.”
