Post offices, delivery routes and now Amazon deals — the USPS crisis is mounting

Postmaster General David Steiner has told members of Congress that the U.S. Postal Service could be forced to cut a day of mail delivery due to budget woes.

In written testimony to the House subcommittee on Government Operations, Mr. Steiner said that “from the historic peak volume of 213 billion pieces per year in 2006 to 109 billion pieces today, we have lost over 104 billion pieces per year … if all of that lost volume was paid at the current price of a stamp, which is 78 cents, that’s about 81 billion dollars.”

Mr. Steiner said the agency’s financial shortfall is exacerbated by anti-monopoly regulations, retirement and workers’ compensation benefits, restrictions on where U.S. Postal Service retirement funds can be invested, a hard $15 billion borrowing limit and the need to deliver to every address six days a week.

Currently, Mr. Steiner said, 71% of U.S. Postal Service delivery routes are “financially underwater” and 58% of post offices do not make enough money to cover their operating costs. He expects the U.S. Postal Service to run out of money within a year; the agency had net losses of $9 billion in fiscal year 2025.

Cutting the number of delivery days from six to five, Mr. Steiner said, would save between $2.9 billion and $3.5 billion each year.

Mr. Steiner pushed back on the idea of instituting a hiring freeze to save cash, telling the subcommittee in a hearing Tuesday that “if we do that, then we won’t deliver mail. … in the last four years, we have about 30, 35,000 fewer employees, and we’re moving toward more of those employees being pre-career rather than career.”

Mr. Steiner said “there’s two ways we can really save money here. That’s changing our mix of career and non-career more toward non-career,” an idea that will face resistance from the union representing USPS letter carriers.

“We will fiercely fight limiting letter carriers’ workers’ compensation benefits in any way or increasing usage of non-career employees in our craft as some in the hearing suggested. Even suggesting such foolish actions are insulting to America’s hardworking letter carriers,” National Association of Letter Carriers President Brian Renfroe said Tuesday.

The finances of the U.S. Postal Service are expected to get worse.

A person briefed on the matter told Reuters Tuesday that, after failing to get a deal done with the federal mail agency, Amazon is planning to cut back its use of postal shipments by two-thirds by September, when its current deal with the U.S. Postal Service expires.

In 2025, Amazon made up 15% of all packages the federal mail agency sent out. The U.S. Postal Service also accounts for 15% of all Amazon deliveries, a number which reaches 30-40% in rural areas, according to the Wall Street Journal.

The two sides are at an impasse over “last-mile” delivery, in which the U.S. Postal Service handles the final leg of a delivery to a business. The U.S. Postal Service decided it wanted to auction off this service to prospective buyers in January.

Amazon told the Wall Street Journal, “We negotiated with [the Postal Service] in good faith for over a year to try and reach a deal … when the USPS abruptly walked away at the 11th hour and introduced the auction concept. … we now have to prepare to meet our customers’ delivery needs regardless of the outcome of the auction.”