USPS Q3: net loss of $2.5 billion

The U.S. Postal Service has announced its financial results for the third quarter of fiscal year 2026 (Apr. 1, 2026 – Jun. 30, 2026). Controllable loss, which excludes certain expenses that are not controllable by management, was $1.0 billion for the quarter, compared to controllable loss of $1.6 billion for the same quarter last year.

Net loss for the quarter under generally accepted accounting principles (GAAP) totaled $2.5 billion, compared to $3.1 billion for the same quarter last year. This $562 million decrease is attributed to an operating revenue increase of $1.1 billion along with a decrease in workers’ compensation of $416 million. These are partially offset by increases in retirement benefits of $324 million, retiree health benefits of $195 million, and compensation and benefits of $129 million.

“Our results this quarter reflect some progress relative to those areas of the business where we can exercise control, namely with revenue generation, cost control and service improvement,” said Postmaster General David Steiner. “Nevertheless, the Postal Service is today continuing to face a severe liquidity crisis, and our financial losses this quarter reflect systemic challenges inherent in our Congressionally established business model and regulatory framework. We are taking responsible steps to conserve cash to extend our operating window, but we require thoughtful legislative and other actions to establish a financially sustainable Postal Service capable of serving the American public far into the future.”

Total operating revenue was $19.9 billion for the quarter, an increase of $1.1 billion, or 6.1 percent, compared to the same quarter last year. The increase was driven by continued growth in our USPS Ground Advantage Shipping and Packages subcategory and strength in our Marketing Mail category. This was supplemented by price increases in our First-Class Mail and Marketing Mail categories and a transportation-related, time-limited price increase implemented on April 26, 2026, for certain offerings in the Shipping and Packages category. These increases were partially offset by declining volumes in the First-Class Mail and Shipping and Packages categories.

Shipping and Packages revenue increased $588 million, or 7.7 percent, on a volume decline of 55 million pieces, or 3.4 percent, compared to the same quarter last year. Marketing Mail revenue increased $440 million, or 12.3 percent, on a volume increase of 574 million pieces, or 4.3 percent, compared to the same quarter last year. First-Class Mail revenue increased $255 million, or 4.3 percent, on a volume decline of 343 million pieces, or 3.5 percent, compared to the same quarter last year.

Total operating expenses were $22.5 billion for the quarter, an increase of $438 million, or 2.0 percent, compared to the same quarter last year. This increase was primarily due to higher retirement benefits, accrued retiree health benefits top-up expenses, higher compensation and benefits expenses, and the impacts of rising fuel costs that led to higher transportation expenses and higher other operating expenses. These increases were partially offset by the favorable impact of actuarial revaluation of existing workers’ compensation cases.

On April 9, 2026, the Postal Regulatory Commission (PRC) granted a Temporary Conditional Waiver of required payments towards the annual pension amortization obligations. In addition, the organization elected to suspend payments for the bi-weekly normal cost contributions for employees covered under the Federal Employees Retirement System (FERS) and deferred approximately $1.4 billion this quarter. However, the Postal Service’s financial situation, and specifically its liquidity, remains precarious as these actions are only temporary measures. The pension obligations will have to be eventually satisfied, therefore these measures cannot represent long-term solutions for the Postal Service.

The Postal Service continues to urge the PRC to provide needed flexibility to their regulations in order to help enable the Postal Service to achieve long-term financial sustainability, while also fulfilling the primary mission to serve the American public.

Additionally, the Postal Service continues to urgently request administrative and legislative reforms to address the following:

• Increase the statutory debt limit of $15.0 billion, which is set by Congress and has not been increased since 1992, to access the capital necessary to achieve our mission and continue to compete with private sector companies that have access to credit and capital markets
• Modify retiree pension benefit funding rules determining how the Office of Personnel Management (OPM) apportions the costs for the Civil Service Retirement System (CSRS) benefits of employees and retirees that worked for both the Postal Service and the Post Office Department to allocate these costs between the Postal Service and Treasury by utilizing modern actuarial principles
• Allow diversification of pension assets and the ability to invest in market-based instruments to allow greater flexibility
• Adopt private sector best practices for workers’ compensation administration

Absent such changes and reforms, the Postal Service’s financial outlook remains dire.

“The financial results for the quarter reflect a slight improvement compared to the same quarter last year, as we continue to grow revenue and manage the costs under our control, including reducing 4 million work hours during the quarter,” said Chief Financial Officer Luke Grossmann. “However, management actions alone will not resolve ongoing financial problems that are caused by an outdated business model that isn’t responsive to change. We need to pair those helpful management actions with legislative, regulatory, and administrative reforms to get our organization on its way to financial sustainability.”

Third Quarter Fiscal Year 2026 Operating Revenue and Volume by Service Category Compared to Prior Year
The following table presents revenue and volume by service category for the three months ended June 30, 2026 and 2025: