Alliance Report

June 8, 2026

Issue 26/9

The leading voice of nonprofits on postal issues for over 45 years.

The Alliance of Nonprofit Mailers is a 501 (c)(4) nonprofit organization established by nonprofits for nonprofits.

PRC Testifies Before Congress on USPS’ Finances and Business Model

The four commissioners of the Postal Regulatory Commission (PRC) on June 4, 2026, testified before the House Subcommittee on Government Operations. The hearing is the fourth in a series held so far by the Subcommittee as they look at the USPS’ financial situation and business model.

Committee Chair Pete Sessions said the PRC is a key stakeholder in the postal universe and has been at the center of core issues including service performance and postal rates. He noted that in March the Postmaster General testified that the USPS would run out of money within 12 months. “Since that time,” he noted, “USPS has suspended employer contributions to the Federal Employees Retirement System, and placed restrictions on non-essential spending. Sessions said he is not aware of an official estimate on how much additional time these measures have bought the Postal Service but he has been given the understanding it might be several years. “Regardless,” he said, “the Postal Service needs our attention – it needs the attention of not only Congress, but the PRC and other stakeholders.”

Sessions said he thinks the current PMG “has the right attitude about his service to the United States of America and in service to the Postal Service.” He commended former Postmaster General Louis DeJoy, “for doing his best to come up with an enduring solution to the Postal Service’s problems.” “He had lots of ideas,” he said, “he had lots of things that he put into place, but I also see how the Delivering for America plan did not provide the results that he had hoped that it would.” He then commended current Postmaster General David Steiner for his willingness to take on the task. He noted that in March, Steiner told the Committee that the Postal Service needs Congressional action to increase the USPS’ borrowing authority, “and just two days ago he presented the SubCommittee with a number of additional legislative requests.” “There is no reason to assume that additional borrowing funds infused into this business model would be anything more than throwing good money after bad results,” Sessions said, “so that is part of why we are here today – to get closer on our collaboration not only with the Postal Service and its great employees, but also with the Postmaster General.” He noted that the Senate also has a number of ideas on the USPS, which will be included.

Ranking Subcommittee member Kweisi Mfume said that as the Postal Service “faces and comes to grips with its own future, the service must continue to cut costs and find ways to creatively increase revenue.” “When Congress passed its last major reform bill to support the Postal Service, then Postmaster General DeJoy spent $40 billion on capitol investments, reduced performance targets, weakened the service performance in under served areas and any solution that Congress is willing to undertake must include more safeguards to hold this and any future Postmaster General and the Board of Governors to the public to ensure they are accountable in various ways.” He said he is particularly interested in discussing any guardrails that strengthen the role of the PRC.

In their prepared testimony, the PRC Commissioners shared their views on the USPS’ financial situation and need for updating its business model.

PRC Vice Chairman Robert Taub focused on the need for Congress to better define the Universal Service Obligation (USO), then determine the costs before looking at what is needed to update the USPS’ business model. Often referring to the Postmaster General’s March testimony before the Committee, Taub said that while the PRC largely agrees with some of the USPS’ assessment of the causes of its financial issues, “some of their explanations give us pause.” “It’s proposed solutions should also be viewed cautiously,” he advised.

“However,” Taub said, “we agree with the Postmaster General on the most important solution.” “Only by first specifically defining what America needs of its postal service and what that costs, will Congress then truly know how best to fix the fundamental funding structure while preserving appropriate deliver and service standards, specifically defining the public service mission – the universal service obligation – should be job 1.” Taub described the Postal Service’s suggested approach as “give us more money with less oversight.”

“The Postal Service is not an independent private business,” Taub stressed. “It is a government establishment with extensive special legal privileges,” he said, “including two statutory monopolies valued at nearly $6 billion over letter delivery and mailbox access that no other private sector company is allowed to maintain.” He said that is why Congress has relied on the Commission “for the past 56 years to protect American consumers and businesses from potential monopolistic abuse such as predatory pricing, poor service, and unfair competition by this government-established agency operating in commercial markets.”

The PRC Vice Chairman also cautioned against moving “full steam ahead” with the USPS’ Delivering for America plan, which he noted is “a plan that promised break-even operations by 2023 and a cumulative 10-year net income of $200 million.” “In fact,” he said, “now in year six of the ten-year DFA plan, the USPS has incurred $31 billion in losses and is on the path to lose even more in the remaining four years of its implementation.” “It is a plan,” he said, “that promised to streamline and save the USPS $28-40 billion by 2030 as initially estimated, yet implementation of the plan has slowed mail delivery across the United States, particularly in rural areas, which to a greater extent rely on affordable and reliable mail delivery.”

Taub noted that the PRC has issued warnings about the USPS finances on several occasions and that Congress has given the USPS financial relief over the past few years and that in 2021 the Commission also gave the USPS additional rate authority above inflation for its monopoly products. “This additional pricing authority helped offset costs from inflation as well as two sources of costs that the USPS argues are outside of its control,” he said. “Since the effective date of the Commission’s new rules in 2021,” he said, “the Postal Service has used all this authority to raise rates by 45 percent for most classes.” “Rate authority due to inflation during that time totals 23 percent,” Taub said, “meaning the Commission provided additional revenue-raising authority to the Postal Service of 22 percent.” He noted that the First-Class Mail stamp price went from 55-cents to 82-cents in just the past five years – a 49 percent increase. “Now more money is being requested with no fundamental solution in sight,” the Vice Chair observed. He said that increasing the USPS’ borrowing authority would extend the crisis but not fix it.

The PRC, in response to the USPS’ pronouncement that it could be out of cash in less than a year, “provided the USPS with a total of nearly $15 billion through 2030 to help avert a cash crisis in the near time by issuing a waiver of regulations requiring minimum retirement payments,” he said. “The Commission’s action offers some breathing room and extends the time before the Postal Service’s reported insolvency and stopping mail delivery for at least another several years, provided the Postal Service makes judicious decisions about its expenditures starting now,” Taub told the Committee. “To be clear,” he said, “this is not a panacea nor a permanent long term fix to the Postal Service’s problems, but it does allow Congress an opportunity to enact thoughtful and fundamental change as opposed to choices of desperation.”

Taub then talked about the need to fully define the Universal Service obligation, referring to the Postmaster General’s March testimony where the PMG told the Committee the Congress should tell it “’what Postal Service needs to do and how to pay for it and we will do it.’” “It is just that simple,” the PRC Vice Chair agreed, noting the current business model is not sustainable. He said defining the USO will mean tough questions have to be answered, such as how many days of delivery per week are needed, what are acceptable delivery times, does the USPS need to offer more or fewer services, does delivery need to be the same across the nation, and more. He said the PRC has extensive experience evaluating the USO, since it is statutorily required to produce a comprehensive annual report on the USO and its costs. “Given the Commission’s substantial work on the USO,” he said, “we would welcome the opportunity to collaborate with this Committee on designing a viable solution with the possible legislative approach detailed in our written testimony.” He said that some may even suggest that the time for the Postal Service has passed, “but with all of the challenges it faces, it still retains an integral place as a key cog in how American businesses conduct their affairs and how Americans all across this land communicate.” “The U.S. postal and delivery sector represents a nearly $2 trillion industry with almost than 8 million jobs, making it vital to our economy,” he noted.

PRC Commissioner Ann Fisher said the USPS faces “an incredibly tough mandate – it must operate like a business by funding itself through its own revenues, yet it must serve the public as a universal service provider delivering to every single address regardless of profitability, all while under persistent financial distress.” “The USPS was designed to be self-funded,” she said, “but it has not reported an annual profit in the last decade.”

“At its core, the question before this Committee is whether the current rate system and broader statutory framework give the Postal Service a realistic path to long term solvency while preserving universal service,” she said. Fisher said that the 2006 Postal Accountability and Enhancement Act (PAEA) directed the PRC to “establish a ratemaking system designed to achieve a set of interlocking objectives laid out in the law.” “Particularly relevant to this discussion on postal finances is Objective 5,” she said, “to ensure adequate revenues, including retained earnings, to maintain financial stability.” “True financial stability requires a system that can lawfully generate the reserves and retained earnings needed to invest in vehicles, facilities, and a modern infrastructure,” she said, noting that “[w]ithout long term viability, the universal service mandate cannot be sustained.”

“If Objective 5 were the only objective the Commission had to consider,” she said, “rates would need to rise about 50 percent to add $10 billion in net income and a $1 billion buffer, likely triggering a roughly 30 percent volume decline and accelerating customer loss,” she stressed. “Fortunately,” she said, “that’s not the way the rate system was designed, as Objective 5 must be balanced with seven other objectives that call for, among other things, maximizing incentives for operational efficiency, cost reduction and maintaining predictable, stable rates and high-quality service standards.”

“The Commission cannot simply allow the Postal Service to price its way out of structural deficit without seriously eroding the very mail volumes that still fund the universal service,” Fisher testified. She said that high quality service comes with costs, including extra staff, transportation, and other costs. “Every gain in service scores has a direct price tag,” she said, noting that about 70 percent of postal costs are labor.

“In 2020, the Commission modified the ratemaking system,” she said, “and granted the Postal Service additional flexibility to raise Market Dominant rates above inflation to help address structural deficits.” “We had to strike a very careful balancing act,” Fisher said, “allowing prices high enough to cover the actual costs of processing and delivery, but not so high that they accelerate volume declines and drive customers out of the mail altogether.” “Those tools have helped stabilize revenue, but they cannot overcome the combination of declining mail volume, rising structural costs, and balance sheet obligations,” she told the Congressional Committee.

Referring to the PRC’s issuance of the waiver for USPS to defer retirement payments, Fisher said that this action allows for emergency liquidity relief. “I hope the issuance of the waiver will allow Congress with time to decide what the nation needs from the Postal Service and help us to finance that mandate,” she said. “From a regulatory perspective, short term liquidity fixes are not a substitute for a sustainable long term financial model for universal service,” Fisher told the Committee.

In closing, Fisher talked about recent service issues in South Dakota and facility closings in that area. She stressed that “rural and remote communities still rely on the Postal Service for affordable delivery of mail and packages.” “This presents both a challenge and an opportunity,” she said, “to evaluate the current needs of Postal Service stakeholders.”

PRC Commissioner Tom Day said he agreed with the positions outlined by PRC Vice Chairman Taub, including the need to define the USO, which he said may be a complex task that will take some time to be completed. “In the meantime,” he said, “there are other critical steps that can be taken to improve the Postal Service, to reduce costs, improve service, and ensure a safe and secure work environment for its employees.” Day said that under current USPS leadership, there is a clear effort to improve service and reduce costs. “More than just an effort,” he said, “real results are being achieved.” “That said,” he noted, “continued use of the network created for the DFA cannot achieve an optimal solution.” He referred to the PRC Advisory Opinion in January 2025 which found the DFA plan to be fundamentally flawed. “Under current effort, improvement will take place,” he said, “it simply will not be the best that could be achieved.”

Day said the issues come down to variations throughout the network, with no two places being the same. “At each of the Regional Processing and Distribution Centers (RPDCs), there are unique communities to be served,” he explained, noting there are “the density in population vary, the types of roadways and traffic vary, and even the types and amounts of mail vary.” “Despite this variation, the Postal Service decided to implement a single uniform format for RPDCs – a seemingly arbitrary 50 mile radius,” Day said. He talked about the USPS’ Regional Transportation Optimization (RTO) initiative, which he said is “objectively and fundamentally flawed.” He said that the majority of facilities in the new USPS network are in the same locations they were in the previous network. “The PRC was clear in its advisory opinion,” he said, “more than a year later the facts and data are clear – we were correct in what we stated last year.” He said the USPS should step back from DFA and properly design its new network.

“It will take some time to study and implement revisions to the USO,” Day said, “as that effort is underway, properly designing and implementing a revised postal network is critical.” Day stressed that not only would a properly designed postal network bring value today, but for years in the future as the landscape changes.

PRC Commissioner Ashley Poling told the Committee that “the situation facing the Postal Service is a five alarm fire.” “Volume of traditional mail continues to decline, a result of ongoing electronic diversion, and an acceleration due in part to the Postal Service’s aggressive pricing strategy.” “At the same time,” she testified, “service continues to suffer as the Postal Service has decided to slow service standards for several mail products over the last five years, including twice for its flagship First-Class Mail product, also lowering its service performance targets.” “What this means is simple,” she said, “the American people are paying more while fewer mailpieces are delivered in the expected timeframe.”

Poling said it is likely time for Congress to authorize additional oversight to ensure the Postal Service meets its statutory obligations to the American people, “especially those obligations spelled out as universal service obligations.” She focused most of her remarks on why fixing the Postal Service is critically important. “Even in world dominated by electronic communication,” she said, “especially for the nearly 66 million rural Americans, the Postal Service continues to fill an important role – not just as a communications channel but as a lifeline for rural residents ordering pharmaceuticals, and other necessary medical items, and an economic engine for small businesses in reaching their customers.” She noted there are numerous stories of letter carriers saving elderly residents. Poling said the “Postal Service can serve as the beating heart of rural communities.”

“As Congress works to clearly define the scope of the USO, it is important to acknowledge that the Postal Service has a number of resources that can be utilized to benefit the American people – a nationwide delivery network, a physical presence in every community in the country, and a large workforce of highly trusted dedicated public servants.” “Each of these assets could be utilized to provide added services to the American people,” she told the Committee. She noted that although the Postal Service Reform Act of 2022 granted the USPS additional authority to provide new products and services to federal, state and local and tribal governments, “a recent Office of Inspector General report noted that the Postal Service has barely begun to scratch the surface on these new revenue opportunities.”

Members of the Subcommittee then proceeded to ask the PRC Commissioners questions and share their views.

Rep. Norton noted that the PRC had granted USPS the ability to raise rates over inflation in 2021, and said that “the Postal Service has repeatedly exercised that power to impose higher costs on American consumers. “Since July 2021, First-Class Mail rates were increased by 42 percent with an additional five percent increase scheduled for next month.” “At the same time,” she said, “delivery standards have gotten worse.” “First-Class Mail now takes 3-5 days to deliver whereas previously it took 2-3 days,” she said. “Americans are paying more in postage for worse service,” she said. She asked to what extent the PRC weighs the deterioration of service. Commissioner Taub said the PRC takes service performance very seriously, and though it allowed the USPS additional rate authority, there has been degraded service during that time. He noted the PRC issued a rule limiting the USPS to once a year price increases, but did not change the USPS’ ability to raise rates above inflation.

Rep. Foxx said that it is “increasingly clear that the Postal Service has lost its way,” and said that “rather than an efficient operation, the Postal Service resembles a bloated federal jobs program that delivers higher postage rates, delays and deteriorating service.” She voiced concerns that the USPS is providing services that private companies could provide better, and at lower costs “such as package labelling technology and IT solutions.” She asked whether the PRC evaluates whether the USPS is duplicating capabilities that private companies have already invested in and developed, to which Vice Chairman Taub responded the PRC does not have that direct authority in the law, but the law requires and the PRC does look at worksharing, and through complaint proceeding to look at cases to determine if the USPS is unfairly competing with the private sector.

Rep. Frost raised the RTO initiative, which he said impacts nearly 72 percent of post offices, and asked the PRC if it believes the initiative will meet its projected savings. PRC Commissioner Poling referred to an advisory opinion issued by the PRC that found RTO to be very challenged and not meeting the projected savings. She said that Americans need to better understand what to expect in terms of USPS service. Rep. Frost voiced concerns about RTO and its impacts on expectations.

Rep. Palmer raised the idea of allowing the USPS to better invest its retirement funds, noting “everyone who has looked at this believes it would significantly reduce the USPS’ financial burden.” PRC Vice Chairman Taub said he thinks it is a reasonable suggestion, that the Secretary of the Treasury would need to be at the table, but from the PRC’s perspective, all things should be considered. Rep. Palmer said that a bipartisan review of the idea should be undertaken. He asked the PRC what other cost savings measures the USPS is considering, and Taub said the USPS has suspended FERS payments and also has issued a directive limiting expenditures.

Rep. Randall talked about the importance of the USPS to her rural constituents and service issues that have been plaguing them. She said that national average USPS service performance scores does not tell constituents about their specific mail delivery experiences. Commissioner Poling said that the PRC’s Annual Compliance Determination (ACD) report and process does look at service performance in more detail and she noted that election mail receives better service performance than other mail because of the USPS’ efforts. She said the PRC is looking at service performance as part of a current docket and that more visibility is a part of that.

Rep. Gill asked the PRC about the USPS’ losses in the past few years, which the PRC said amounted to $31 billion over the last 5 years. Rep. Gill clarified that was despite funds provided to the USPS by Congress. He asked why the financial projections in the DFA have not come to fruition. PRC Vice Chairman said that while inflation caused some losses, the plan needs to be reviewed. He noted that the DFA includes “immense amounts of capitol investment,” which seem to be still in the USPS’ plans.

Rep. Bell talked about service issues for his constituents, which have been documented by OIG audits showing delayed mail. He asked the PRC what it can do when issues like these are identified, and whether the PRC is more tasked with national overall performance vs. geographic issues. Commissioner Poling said the PRC advisory opinion process is the only mechanism available to the PRC today and that is for nationwide service changes the USPS undertakes. “That is somewhere that could stand to be strengthened,” she said, expressing her personal opinion.

Rep. Jack asked about USPS’ costs, with PRC Vice Chair Taub reiterating that about 70 percent of the USPS’ costs are in labor. He said that although the USPS has achieved some transportation cost reductions through the DFA, labor is the largest cost area for the USPS. In response to the question of where the USPS would be 2 or 5 years from now if no action is taken, PRC Vice Chairman Taub said at some point, something has to give. Retiree health benefit payments of $31 billion will kick in again for USPS, which is in addition of the $6.6 billion costs for fulfilling the USO.

Ranking member Mfume said there is a “lot to pick through.” He said there is a critical need for defining the universal service obligation – “if we don’t do that, we’ve just not done anything, we’ve kicked the ball down the road,” he said. He said some things before Congress may be so large and voluminous that they look to the Committee to assist.

Rep. Budzinski, co-chair of the Congressional Postal Caucus, talked about the USPS’ financial losses. “Any postal reform bill sanctioned by Congress must include provisions that protect and strengthen the role of the Postal Regulatory Commission,” she said, “contrary to what some at the Postal Service have said about the PRC, I believe they are a critical oversight body.” “In the coming months and years as Congress moves forward with potential reform ideas,” she said, “I want to emphasize the importance of an independent Postal Regulatory Commission and look to expand its oversight ability.”

She asked the PRC about the RTO initiative, why the USPS’ analysis was flawed and what lessons could be drawn for future network changes that impact rural communities. PRC Vice Chairman Taub said the PRC under the law is limited to providing an advisory opinion, which it did on the RTO initiative, cautioning the USPS that its projected savings were at best illusory and could not be verified, as well as deep concerns that rural America would see slower service under the RTO plan. “It gives me no joy,” he said, “that our concerns have come to fruition.”

Rep. Budzinski also asked if there are precedents that would be helpful. PRC Vice Chairman Taub talked about a possible legislative approach such as was used in the telecon space by the FCC to develop the finer points of the statutory changes needed.

Rep. Walkinshaw, member of the Congressional Postal Caucus, said clear goals are needed that prioritize both the long term financial viability and service. He said data is needed on the various proposals to assess their long term impact as well as accountability for the USPS. He noted that he had asked the Postmaster General in March about financial projections for initiatives such as DFA and RTO. He said the two-page response from the USPS on five-year financial projections said it could only provide general information to answer the questions which he said “largely rehashes documents that have been issued publicly,” but does not respond to what he had requested. He asked the PRC whether the USPS should have been able to provide such information and PRC Vice Chairman Taub said the request was the same as the GAO had recently recommended for the USPS and they responded they were not doing it. “I am asking the Postal Service to help us help you,” Rep. Walkinshaw said, to be able to show to colleagues that there is some path to making changes.

In closing, Chairman Sessions said “if we do not work together, we will be in trouble.” He asked the PRC about the loss of mail, and whether they could see potential increases in mail. PRC Commissioner Fisher said she believes we can see growth but first need to see improvement in service. She said she believes the USPS is really focused on packages and not sure they will ever be able to really compete in that space. “In the meantime, it seems they pay less and less attention to everything that falls under the Market Dominant products,” she said. “A tremendous amount of our economy relies on that,” she said, and that the USPS should focus more on the Market Dominant side.

Chairman Sessions also asked the PRC about the USPS’ recent strategies to move activities in-house vs. contracting them out to the private sector. “Public-private partnerships, for lack of a better term, have really been the success story of the USPS since it was created in 1970 through worksharing,” said PRC Vice Chairman Taub. “In the early years after the 1970 Act, the USPS was pushing against it but ultimately embraced it,” he said, “and in 2006 Congress recognized that and there is an uncodified part of the PAEA that directed the Postal Service, through a sense of Congress, that public-private partnerships are critical, whether in the transportation space or other ways to leverage that.” Taub said he has been concerned over the last few years with the evolution of the DFA and a concerted USPS effort to bring more in-house. He said it was heartening to see the recent DHL-USPS agreement to open up the last mile.

PRC Issues Report Analyzing USPS Finances

The Postal Regulatory Commission (PRC) on May 21, 2026, issued a report analyzing the Postal Service’s financial condition. “The Postal Service has not had a profitable year in the last decade,” it said. The PRC’s “Financial Analysis” report examines the USPS’ finances for FY2025 “using well-known financial metrics.” “This analysis provides greater clarity, transparency, and accountability of the Postal Service’s financial data and trends,” the PRC said, noting that “[a]t the end of FY 2025, the Postal Service’s financial position reflected continued net losses and a large net deficit.” The PRC said,

“In FY 2025, the Postal Service recorded a net loss from operations of $2.7 billion. Compared to FY 2024, the increase of $0.9 billion in net loss from operations was the result of a $1.8 billion increase in operating expenses, partially offset by an increase of $1 billion in revenue. The increase in operating expenses occurred despite total volume decreasing by 3.7 percent, including a 3.2 percent decrease in the volume of Market Dominant products. The disconnect between workload and costs also resulted in a 2.1 percent decrease in Total Factor Productivity, marking the ninth decline in the last ten years. Despite decreases in volume, operating revenue increased by 1.3 percent. Market Dominant product prices, such as First-Class Mail, increased by approximately 15.2 percent between July 2024 and the end of FY 2025.”

The PRC said that “[w]hen Non-operating Expenses are included, the net operating loss of $2.7 billion results in a net loss of approximately $9 billion.” “This is an improvement of $0.5 billion compared to FY 2024,” it noted, but said, “[h]owever, losses sustained over the past 10 years have weakened the Postal Service’s financial position, resulting in a significant gap between assets and liabilities.” “At the end of FY 2025, the Postal Service recorded total assets of $41.7 billion and total liabilities of $83.3 billion.” The PRC included the below graph showing the USPS’ net income trends over the past ten years.

USPS Net Income Trends Over 10 Years

In its press release where it announced the release of its report, the PRC provided a “summary of the primary contributors to the Postal Service’s financial condition,” which included (but was not limited to):

“The net deficit was $41.6 billion, consisting of an accumulated deficit of $57.7 billion offset by capital contributions of $16.1 billion, the highest level of capital contributions since passage of the Postal Accountability Enhancement Act.”
“In FY 2025, the Postal Service had more cash on hand than the year before, but it had much less in short-term investments, and it stayed at its full $15 billion borrowing limit without paying any of that debt down. Overall, it had less total liquidity available to cover its short-term debt than it did the year before and less than its average over the past decade. ”
Operating revenue rose to about $80.6 billion, an increase of roughly $1 billion (1.2 percent), driven by USPS Ground Advantage growth and price increases across mail and shipping.

Total operating expenses stood at $83.5 billion, which was $1.7 billion higher in FY 2025 than the prior year, and $0.1 billion more than the Integrated Financial Plan.

Highway transportation costs went up slightly in 2025, by about 1 percent, after dropping more than 8 percent the year before, because the Postal Service relied more on flexible, but generally more expensive freight auction trips. At the same time, air transportation costs fell by almost 18 percent because more packages were shifted from planes to trucks, which are usually cheaper for many routes. Total operating expenses ended up higher than the Postal Service had planned because compensation and transportation costs were higher than expected. Pay and benefits alone were $0.4 billion higher than planned, primarily because inflation pushed up cost-of-living adjustments for employees.
Almost 70 percent of the Postal Service’s expenses are for employee pay and benefits. In FY 2025, it used 5 million more hours of overtime, but 12 million fewer total workhours and had 15,000 fewer employees than the year before.
The career workforce declined for the first time since FY 2020, with a decrease of approximately 2,400 employees. The non-career workforce declined by approximately 18,000 employees. Compared with FY 2020, it now has about 35,000 more career employees and about 55,000 fewer non-career employees.”

The full PRC report is available here: https://prc.arkcase.com/api/prc-dockets/filing/downloadFile?fileId=254038&inline=true

USPS Restricts Nonessential Spending

As reported by Federal News Network, Postmaster General David Steiner has issued an internal memo restricting nonessential USPS spending which will impact hiring, travel and training as well as other spending. “As you are aware,” the Postmaster General wrote, “we are currently experiencing a temporary cash-flow shortage that requires us to take decisive steps to manage our available resources responsibly.” “To protect core operations and ensure we can continue meeting all essential obligations,” he wrote, “we are implementing immediate restrictions on non-essential spending across all departments.”

The memo outlines policies around spending for travel; supplies and materials; professional services and consultants; events, training and conferences; and technology and software purchases. It also includes reporting and monitoring procedures and policies on hiring/organizational changes.

“These restrictions will remain in place until our cash position stabilizes,” the Postmaster General wrote, “[w]e will reassess periodically and communicate updates as conditions change.”

The letter comes on the heels of the March testimony of the Postmaster General before Congress that the USPS is facing a liquidity crisis and could run out of cash in the next year. It should be noted, however, that the Postal Regulatory Commission (PRC) testified last week to Congress that the waiver it granted the USPS on retirement payments will ensure that it will not run out of cash for at least the next several years (see article on PRC testimony to Congress).

USPS Enters Into $10 Billion Agreement with DHL eCommerce

DHL eCommerce on May 28, 2026, announced a “new exclusive multi-year contract” with USPS “for last-mile parcel delivery services in the U.S.” “At an expected value well over $10 billion (USD), the agreement is unprecedented in the 25-year DHL eCommerce-USPS relationship and positions both organizations for long-term competitive success,” DHL eCommerce said. “Strengthening the USPS relationship helps DHL eCommerce capitalize on accelerating e commerce trends, and expand in the U.S. market over the next several years through its domestic and international services,” it said.

“DHL eCommerce handles nationwide pickup, sortation across its 19 fully automated hubs, and linehaul on its air and ground network before partnering with USPS to complete the final mile for all deliveries,” the company said in the announcement, noting it “taps into the Postal Service’s unmatched final-mile network, which reaches more than 41,550 ZIP Codes and more than 170 million delivery points six days a week.”

“This agreement creates a dependable, long-term platform for our customers,” said Scott Ashbaugh, CEO of DHL eCommerce Americas. “Working with USPS allows us to serve communities nationwide in a highly efficient way, minimizing additional vehicles on the road and supporting our commitment to reducing emissions. Postal Service carriers are trusted members of the communities they serve, and we’re proud to partner with an organization that shares our focus on reliability, transport safety, and public service.”

“Today marks an exciting milestone in the evolution of our relationship with DHL eCommerce,” said Postmaster General and CEO David Steiner. “This extended and exclusive agreement reflects a shared commitment to innovation, operational alignment, and delivering greater value to the shipping marketplace. By aligning more closely with our transformed network, we are creating a stronger, more efficient last-mile solution that expands customers’ access to the Postal Service’s unmatched reach. Together, we are building a more flexible, market-responsive model that enhances reliability, supports growth, and positions both organizations for long-term success.”

PRC Files PSRA Section 207 Report

The Postal Regulatory Commission (PRC) on June 2, 2026, issued its “Section 207 Report,” which it is statutorily required under the Postal Service Reform Act of 2022 to issue every five years.

In the report cover letter from Postmaster General David Steiner, he told Congress that “the business model and liquidity crisis facing the Postal Service requires prompt action from public policy makers to ensure the survival of a key part of our nation’s critical infrastructure.” Steiner touted improvements made by the USPS in service performance to date in FY2026, attributing the improvements to the $20 billion the USPS has invested in its facilities and processing capabilities. The USPS also talked about revenue gains from Ground Advantage parcel service and said it has “opened our DDU network to more businesses and secured new or updated contracts to offer our services to more people.”

The USPS in its cover letter also highlighted other achievements in improving efficiency and cutting costs since the 2022 enactment of the PSRA, including reducing transportation costs, reducing workhours, reduced staffing, termination of Contract Postal Units (CPUs), and DOGE-suggested self-review of other contracts. “Despite the improvements in service, revenues, investments, and cost-cutting,” Steiner wrote, “it is not enough.” “That is why action is needed by Congress, the Administration, and the Postal Regulatory Commission,” he said. He emphasized that “public policy makers have three choices,” which include doing nothing and the USPS runs out of cash; “draconian cuts to service and increased prices;” or “commonsense legislative and administrative changes to the USPS structure and business model.

On the first option of running out of cash, Steiner said “it’s highly likely that mail and package delivery will stop,” and that “[a]ny disruption to mail service would cripple a significant part of the nation’s economy valued at $1.9 trillion and jeopardize the jobs of 7 million people.”

On the second option of draconian service cuts and increased prices, Steiner said “[i]t is unlikely that public policy makers, stakeholders, or the American people would tolerate the level and nature of change necessary to maintain operations in this manner.”

Steiner said the USPS advocates for the commonsense legislative and administrative changes option. He specified several different changes, including increasing the USPS’ borrowing authority, granting the USPS the authority to invest its retirement assets in the same manner as most public and private sector organizations, )adjusting the allocation of CSRS liabilities between the Dept. of Treasury and the USPS (valued at about $3.5 billion, and modest adjustments to workers compensation program.

Talking about granting USPS the authority to better invest its retirement assets, Steiner wrote that “[a]t the end of FY 2022, the Office of Personnel Management (OPM) estimated that the Postal Service had $298 billion in total retiree assets.” “Beginning in the first full year of each fund (FY 1972 for CSRS, FY 1988 for FERS, and FY 2007 for the PSRHBF), if the Postal Service had adopted an investment strategy consisting of 40 percent U.S. bonds and 60 percent U.S. stocks, its three retiree plans could theoretically have had $1.2 trillion in assets at the end of FY 2022.” “Assuming an 8.53 percent annual investment return, based on the S&P 500 Bond/Stock Index 5-year weighted average annual return, those assets could theoretically grow to approximately $2.3 trillion by the end of FY 2030,” he said.

“Absent this slate of reforms, or perhaps in addition to them,” Steiner wrote, “Congress could consider restoring an already Congressionally authorized public reimbursement of $460 million a year, in appropriations.” “Another option is a new authorization and appropriation for an amount that would be truer recognition of the ongoing cost of providing universal service that enables $2 trillion in economic activity to the nation,” he said.

Steiner also said that the PRC should modify the rate-making system for Market Dominant products in keeping with the USPS’ December 2025 petition as part of the PRC’s five-year review “to help ensure that rates can better support the Postal Service’s financial condition.” “I continue to observe that the constraints imposed on the Postal Service’s business model, particularly our pricing constraints, do a serious disservice to the financial realities in which any analogous enterprise could realistically operate,” the Postmaster General wrote. [It should be noted that the USPS’ rate-making system proposal is to eliminate all price caps and reduce regulatory oversight, or to impose 23% price increases, both of which the Alliance and others have opposed.]

The Section 207 report looks at a variety of metrics identified by Congress in the PSRA, including mail and package growth; effects of pricing on volume; use of the USPS facilities; status of USPS Connect; use of Competitive parcel services and impact on revenues; use of USPS Connect Returns service; use of USPS E-Commerce Marketplace; updates on the USPS transportation network; efforts to enhance employee training, safety, and wellbeing; review of efforts to improve employee allocation; rate of planned investment into Postal Service processing, transportation, and delivery equipment and infrastructure for market-dominant and competitive products; changes to network distribution centers and the expansion of regional distribution centers, including costs associated with the changes and any realized reduction in operational expenses or improved resource efficiencies; review of the ability of the Postal Service to meet performance targets; progress of the Postal Service in achieving any new, self-funded investments; and any other information the Postal Service determines relevant. The public version of the report contains redactions.

PRC Moves Ahead with USPS Service Performance Reporting Changes

The Postal Regulatory Commission (PRC) on June 4, 2026, denied the Postal Service’s motion for reconsideration of Commission Order No, 9566, which required the USPS to make changes in its annual service performance reporting. The USPS argued that various aspects of the amendments adopted by the PRC “were either legally unauthorized or fell short of reasoned decision making.”

The PRC said the USPS’ motion for reconsideration did not raise any new questions and it had responded to the USPS’ concerns in its final order. The PRC order requires the USPS to file notice with the PRC at least 30 days prior to implementation before making proposed changes to its service performance reporting system and that the USPS must demonstrate that internal or hybrid service performance reporting systems “are capable of producing accurate, reliable, representative, and useful service performance data and results,” that changes may not be implemented without prior PRC approval, that the PRC may initiate a proceeding at any time to consider whether internal or hybrid service performance reporting systems are producing accurate, reliable, representative, and useful service performance data and results or that any interested person may submit a petition for the PRC to initiate such a proceeding; no later than 7 days before planned implementation of any change to service standard delivery day ranges or origin/destination ZIP Code pairs that affect the number of days to delivery, the USPS shall file notice with the PRC describing the exact nature and scope of implementation; whenever the USPS proposes the addition of a new market dominant product or a change to an existing market dominant product, it also shall propose new or revised (as necessary) service performance measurement systems, service standards, service goals (including performance targets), data reporting elements, and data reporting methodologies; the USPS shall establish reasonable performance targets for each market dominant product for each fiscal year and provide such targets to the PRC not later than 60 days after the beginning of the fiscal year in which they will apply, and such targets shall balance a clear path toward improving performance and being realistically attainable, and the PRC will use each reasonable target set by the USPS to evaluate compliance for each market dominant product for a given fiscal year.

USPS Publishes Proposed Rules on Election Ballots

The Postal Service on June 2, 2026, published proposed rules in the Federal Register, to amend mailing standards regarding the transmission of mail-in or absentee ballots for federal elections “pursuant to its rulemaking authority,” in response to the March 31, 2026, Presidential Executive Order 14399, Ensuring Citizenship Verification and Integrity in Federal Elections.

“The proposed rule would apply uniform standards for the mailing of absentee ballots to and from voters, which the Postal Service understands will facilitate the faithful execution of federal law,” it said, noting that the USPS “has the authority to change its regulations to achieve this purpose.”

The USPS proposes adding a section to DMM 705, Advanced Preparation and Special Postage Payment Systems, that contains preparation conditions “when mailing ballots for general, special, or run-off federal elections, except that these conditions do not apply to ballots covered under the Uniformed and Overseas Citizens Absentee Voting Act (52 U.S.C. 20301 et seq.).” The proposed rules apply to envelope design and review standards, provide for an optional pre-mailing notice that states may provide to the USPS and “facilitate the process for states to enroll individuals with the Postal Service for inclusion on state-specific lists for mail-in and absentee ballot participation.”

“Under this proposal,” the USPS said, “states would retain full control over who would (or would not) be able to vote by mail in federal elections within each state, as states would control enrollment with the Postal Service for inclusion on the state’s Mail-In and Absentee Participation List.”

The proposed rules include establishment of a new verification standard “to support transmission of compliant mail-in or absentee ballots.”

“The proposed rule would not make changes to the Postal Service’s longstanding Election Mail practices concerning the processing and delivery of ballots that enter the mailstream,” it said, “including completed ballots mailed by voters to election officials.”

Comments on the USPS proposed rules are due July 2, 2026.

Into the Postal Weeds…

For those who live in the “postal weeds,” and are looking for news on mail entry, preparation, discounts, incentives, and more, this column in the Alliance Report will be right up your alley! We won’t go all the way into the weeds…but we will offer up highlights on useful resources and mailing standard changes.

2026 Labeling List Changes:
- L004, L009, L010, L015, L601, L602, L605, will be eliminated
- No changes, other than regular structural and/or operational-driven changes, made to Labeling Lists: L001, L005, L007, L008, L012, L014, L016, L051, L054 (non-published), L201, L606, L607
2026 Labeling List Changes Published in January 2026:
- L016 – SCF Flats published January 2026
- L005 SCF Letters & L051 Parcel Select / Market–Dominant ParcelsJanuary 2026
Timeline for Labeling List Deletions
- DMM Changes to support the above will be published July 12, 2026
- The last publication for these lists will be the November Postal Bulletin and the release of the lists to the mailers.
- The last effective date for these lists will be November 1, 2026.
- The lists will cease on December 31, 2026, and no longer be seen or available.
- The last grace date to use these lists will be December 31, 2026.
Timeline for Mail Direction Files (MDF)
- Labeling List Changes will be reflected in the October published and November effective Mail Direction Files
- ADC entry and presort discount will no longer be applied in PostalOne! July 12th Price Change
- All A=ADC B=NDC discount nomenclatures will be removed from MDF in the July publish and August effective. This is the timeline for removing from the MDF look-up in FAST.
- The grace period for entering ADC Pallets at Postal Facilities will be January 1, 2027

**Alliance August Webinar for members & sponsors only – Register Now!**

Our 3rd webinar for 2026 will be held in August and will be for Alliance nonprofit members and sponsors only. This next webinar will provide updates on regulatory and legislative postal proceedings as well as news from the July meeting of the Mailers Technical Advisory Committee (MTAC).

The webinar will be held on Wednesday, August 5, 2026, from 2-3 EST. Registration is open at https://zoom.us/meeting/register/gSoLn9aqRRW-O9FLKqTEEw.

The Alliance is planning to hold more webinars in 2026, some will be restricted to Alliance members only, others will be open to all. If there are specific topics or speakers your organization is interested in having a webinar on, email me at kathy@nonprofitmailers.org.

Alliance Report June 8, 2026, Issue 26-9