The Postal Service is starting to see the impact of major reform legislation on its finances, but still expects to raise mail prices again early next year.
Postmaster General Louis DeJoy told the USPS Board of Governors at a public meeting Tuesday that the USPS is currently looking at $60 billion to $70 billion in losses by 2030, which “will quickly wipe out our balance of $20 billion in cash unless we take immediate and substantial action.”
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The Postal Service is starting to see the impact of major reform legislation on its finances, but still expects to raise mail prices again early next year.
Postmaster General Louis DeJoy told the USPS Board of Governors at a public meeting Tuesday that the USPS is currently looking at $60 billion to $70 billion in losses by 2030, which “will quickly wipe out our balance of $20 billion in cash unless we take immediate and substantial action.”
“All stakeholders must realize that every day lost in executing our strategy will eat into cash and eventually build up to a deficit that will require more aggressive action by us or the federal government ” DeJoy said.
USPS originally projected $160 billion in losses over 10 years when it released its reform plan last year.
DeJoy said the USPS remains on track to raise mail prices again in January, but is committed to keeping the postal community informed about those changes.
“We have to face the reality of our financial situation and the impact inflation will have on our improvement strategies,” DeJoy said.
The Postal Service ended the third quarter of 2022 with net income of $59.7 billion, compared with a net loss of $3 billion in the same period last year.
However, USPS says the net income is due almost exclusively to the non-cash impact of the Postal Service Reform Act that President Joe Biden signed into law in April.
USPS Chief Financial Officer Joe Corbett said the agency remains “in a financial hole” and more progress is needed on the 10-year reform plan.
“Although we have achieved a tremendous amount of execution of the [Delivering for America] plan, we still have a lot of work to do. We must continue to execute the stewardship initiatives in our Delivering for America plan to fill this gap and return the Postal Service to continued self-sustaining financial health,” Corbett said.
DeJoy said USPS contributions to its employees’ retiree health care plan, under the Postal Service Reform Act, will resume in 2026 and grow to about $6.7 billion annually.
“We’re not going to be able to make those payments unless we commit and get all of our initiatives on time, and we’re trying to do that,” DeJoy said.
Amber McReynolds, a member of the USPS Board of Governors, said the agency is having trouble recruiting new mail carriers, especially in rural communities.
“We are a recruitment agency. We have trouble filling some of those positions, and that will continue to be a problem,” McReynolds said.
DeJoy said USPS is working on new ways to hire and retain new employees.
“We are deploying new recruitment tactics and working with our union leadership to develop ways to improve this situation,” he said.
Ron Stroman, a member of the USPS Board of Governors and former deputy postmaster general, proposed a “gradual approach” to the recently announced USPS network changes, given the complexity of the changes.
“This will allow the board and management to review the progress of the debate on new and innovative ideas, consider emerging technology and consult with key stakeholders and industry leaders,” Stroman said. “To me, the true test of a redesigned network is whether it results in a ground transportation infrastructure that can meet or exceed existing service standards in all areas of the country.”
Stroman praised the “unprecedented level of financial support” that Congress has provided to the USPS, but said that as mail volume continues to decline and as delivery points increase, the benefits of its “national network of unmatched delivery” will continue to erode unless changes are made. they are done
“The Postal Service needs to evolve,” Stroman said. “As we begin this necessary transition as an entity independent of the executive branch, it is vital to maintain public trust and understanding,” he said.
Stroman said the USPS plans to consolidate its delivery network into regional sorting and delivery centers will improve regional on-time delivery, provide better working conditions for employees while maintaining its nationwide retail infrastructure.
“In my view, the board should ensure full transparency on plans to reconfigure our transportation and processing networks. We should prioritize regions of the country that have been substantially underperforming due to design issues in the network,” he said.
Stroman called for reinvestments in the network of post offices across the country, calling them a “strategic asset.” He said USPS can “transform many of them into centers of technology and innovation.”
“While the Postal Service provided a lifeline to the American people during the pandemic, the Postal Service provides a lifeline to rural and underserved communities every day,” he said.
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