The U.S. Postal Service (USPS) has been a cornerstone of American communication and a vital link connecting communities across-the-country. It has also been struggling with financial challenges for decades.
The USPS reported it lost $2.5 billion in the second quarter of 2023, an increase in net loss of $1.8 billion compared to the same quarter last year.
The struggles started with the proliferation of digital communication and online transactions, which compete with the Post Office. And have resulted in declining mail volumes and ongoing financial struggles.
First-Class Mail, the USPS’s most lucrative product, has experienced a drastic decline, while private companies’ competition in package delivery poses a further threat.
Additionally, the rising costs of employee compensation and other operational expenses have outpaced revenue growth, exacerbating financial strain.
USPS Financial Challenges
In 2021, the USPS implemented a 10-year strategic plan to offset the problems. The plan is supposed to eliminate operational losses and bolster its financial sustainability. It also aims to improve the quality of mail delivery service.