The United States Postal Service (USPS) reported a net loss of $2 billion for the second quarter of fiscal year 2026, which is $1.3 billion lower than the $3.3 billion net loss suffered in the same quarter in 2025.
The decline in net loss is due to a $463 million jump in operating revenue and a reduction of $1.3 billion in workers’ compensation expenses, USPS said in a May 8 statement. The postal service attributed the increase in operating revenue to higher prices charged for shipping and packages, marketing mail, and first-class mail services.
However, the benefits of higher prices were partially offset by lower volumes. In Q2 2025, USPS handled around 26.5 billion pieces of mail and other items, which dropped to roughly 25.6 billion pieces in the second quarter of this year.
On the expenses side, other operating costs rose by $72 million while retiree health benefits expenses surged by $175 million.
Chief Financial Officer Luke Grossmann said that the financial results for the quarter “showed slight improvement” compared to the same quarter last year as the postal service continues to grow revenues and tries to manage costs.
Postmaster General David Steiner said the agency was able to get its revenue, cost, and service results moving in the “right direction” this quarter.
“However, the scale of our financial improvements compared to the prior year was modest and we have a long road to go to achieve anything close to long-term financial sustainability. It is a simple fact that we are in a cash crisis, and we are now taking serious and appropriate steps to conserve funds to operate,” Steiner said.
“To avoid disruption and to sustain our role supporting American commerce and the public, we require urgent Congressional action to expand our borrowing authority and to address outdated constraints on the organization.”
For the entirety of fiscal year 2025, USPS registered a $9 billion net loss, which followed a $9.5 billion loss in 2024 and a $6.5 billion loss in 2023.
During a March 17 testimony before the House Committee on Oversight and Government Reform, Steiner blamed the “drastic reduction” in the use of mail as a reason for USPS’s financial woes.
“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 in our system. For perspective, if all of that lost volume was paid at the current price of a stamp, which is 78 cents, that’s about $81 billion. No company could weather that much revenue loss,” Steiner said.
Losses and Reforms
Testimony at the March 17 hearing by David Marroni, director of physical infrastructure at the Government Accountability Office, said that USPS has lost money every single fiscal year except one since 2007, suffering $118 billion in net losses since then.While the postal service maintains enough cash reserves to continue operations, it has done so partly via borrowing the maximum limit of $15 billion from the U.S. Treasury. Given that USPS is expected to incur billions of dollars in new expenses by 2031, the financial condition of the agency is at a “critical point.”
Commenting on USPS’s Q2 2026 results, nonprofit advocacy group Keep US Posted said in a May 8 statement that Congress needs to include reforms in any financial relief provided to the postal service amid its looming bankruptcy.
“Raising the Postal Service’s borrowing authority or providing funds without without guardrails would be a blank check that only delays the inevitable collapse of the agency’s finances and leads to a massive taxpayer bailout. USPS has already maxed out its borrowing, which is currently capped at $15 billion,” said Kevin Yoder, executive director of the group.
“USPS needs help from Congress, but any financial assistance should be tied to a CPI-based price cap, stronger Postal Regulatory Commission oversight, and measurable cost controls that protect universal service and affordability,” Yoder said, referring to the Consumer Price Index (CPI), which measures inflation.