How Can The United States Postal Service Become Profitable? (2024)

The author argues that new revenue areas need to be explored leveraging the USPS as a physical storefront. Image: Kenishirotie/Shutterstock.com

According to a report from the United States Postal Service, the Postal Service has lost 2.1 billion dollars, half way through Fiscal 2023. I anticipate that the Postal Service will lose as much as 4 billion dollars once their fiscal year concludes.

If the Postal Service was my client, I would explain to them that this is 2023 not 1923. The Postal Service has to change the way it does business and needs to think about implementing new business strategies. The following are my ideas to create a more profitable Postal Service.

1. Reduce weekly delivery from six days to four days.
The Postal Service reported to Congress that from 2004 to 2022, the volume of First-Class mail has been greatly reduced. The reason for the reduction is simply due to technology. Instead of the public using the mail delivery for correspondence, paying bills and mailing birthday cards, the public is using email, text messaging, online banking and e-cards.

To reduce mail delivery to four days per week would take an act of Congress. This reduction would reduce most of the overtime wages. In addition, there would be a significant reduction relating to delivery expenses such as fuel, vehicle maintenance and other transportation expenses. Express mail and priority mail can continue to be delivered each day. Most importantly, the 32,000 post offices remain open six days per week so that the public can mail out letters, packages and pick up special handling mail.

2. Comply with the Federal Acquisition Regulations (FAR).
The Postal Service is a special governmental entity that is exempt from complying with the Federal Acquisition Regulations (FAR). The Postal Service has postal delivery contracts that are not profitable. Postal Rates applied to these contracts are too low. Also, the Postal Service has service contracts that are over 30 years old. They need to re-evaluate them to see if another vendor would provide the same service for less money. These services are transportation contracts, janitorial contracts and service repair contracts. Amazon which once relied on the Postal Service for their package delivery needs now has their own fleet of planes and trucks.

3. Innovate more.
The Postal Service needs to create other avenues of revenue by providing services outside of the mail delivery service. This can be done because there are 32,000 postal facilities across the country.

The Postal Service partners with the State Department to provide a Passport Application service. They could partner with the Internal Revenue Service (IRS) and the Social Security Administrations (SSA) and the Small Business Administration (SBA) to make sure that the correct individuals are receiving their IRS tax refunds, Social Security payments or SBA loans.

The Postal Service could have a pickup service for packages for companies such as Amazon, Walmart and other companies. Also, the Postal Service can serve as a package return drop off location.

Everyone is selling gift cards. Walmart, Target, eBay and your local supermarket. Why can’t the Postal Service sell gift cards and other things through its vast network, for example?

These revenue producing areas and others need to be explored to help ensure the longevity and viability of the US Postal Service.

Abraham Grungold is a retired federal employee with 36 years of federal service – including with the USPS Inspector General, the VA Inspector General, the US Dept of Justice, and the US Dept of Labor. Through his company AG Financial Services he helps federal employees with their TSP and federal retirement planning and decisions. Mr. Grungold has written over 50 articles regarding the TSP and FERS retirement and been a guest on several podcasts with the Federal News Radio and Government Executive Magazine.

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