U.S. Postal Service's Financial Viability
Declining mail volume, annual net losses, and growing debt have contributed to the U.S. Postal Services (USPS) deteriorating financial condition and the need to restructure its unsustainable business model.
Since mail volumes peaked in 2006, USPSs financial condition has deteriorated as technology and the Internet have changed how businesses and consumers use the mail, resulting in:
- annual mail volume decline and a 30 percent decline in USPSs most profitable mail,
- accumulated losses of $41 billion, and
- debt totaling the statutory debt ceiling of $15 billion.
USPSs financial condition has been designated as high risk because USPSs business model is not viable as USPS cannot fund its current level of services, operations, and obligations from its revenues and urgently needs to restructure to reflect changes in mail volume, revenue, and use of the mail. Congress and USPS need to reach agreement on a comprehensive package of actions to achieve sustainable financial viability. Proposed strategies and options that Congress could consider to better align USPS costs with revenues and address constraints and legal restrictions that limit USPSs ability to reduce costs and improve efficiency were reported in 2010. USPS issued a 5-year plan in February 2012 that included actions to reduce annual costs by at least $20 billion by 2015, and identified legislative changes needed to implement its plan.