By David Shepardson
WASHINGTON, March 4 (Reuters) – The U.S. Postal Service is hiring restructuring advisers to help address its mounting financial troubles, Postmaster General David Steiner told Reuters in an interview.
Reuters first reported in December that Steiner believed the Postal Service could run out of money as soon as early 2027. USPS has reported net losses of about $120 billion since 2007 as first-class mail, its most profitable product, has fallen to its lowest volume since the late 1960s.
USPS hired consulting firm Alvarez & Marsal for a brief engagement to help with planning for all scenarios, Steiner said.
“We are out of cash in 12 months if we don’t do anything different,” Steiner told Reuters Thursday. “I do not want to be in a position where we’re six weeks out from running out of cash, and we say, Oh heck, what are we going to do?”
Steiner will testify before the U.S. House of Representatives on March 17 to talk about the Postal Service’s financial situation and will warn that without improvements there could be no Valentine’s Day cards delivered in February 2027.
Steiner noted that USPS mail volumes are down 110 billion pieces of mail per year from the peak 15 years ago, which translates into $86 billion in revenue at current prices.
Last month, USPS reported a net quarterly loss of $1.25 billion. USPS has called on policymakers to reform the Postal Service Civil Service Retirement System obligations, give USPS more flexibility over pricing and increase its $15 billion statutory debt limit, which it hit years ago.
“If we can’t get help from the outside, from either our regulator or from Congress on the debt limit — everything’s got to be on the table,” Steiner said.
Steiner wants to be able to raise prices over the current 78 cents for first-class mail and thinks Americans would be willing to pay 90 or 95 cents per letter, when much of the world pays $2 or more.
USPS in January launched an online bidding platform to take proposals for access to its last‑mile delivery network, opening more than 18,000 destination delivery units and local processing centers nationwide to a broader range of customers that could raise badly needed funds.
USPS delivers to more than 170 million U.S. addresses six days a week, with the last mile the most expensive part of deliveries. The last mile is also expensive for companies like FedEx UPS and Amazon.com.
In 2022, Congress provided about $50 billion in financial relief over a decade and required its future retirees to enroll in a government health insurance plan.
The law eliminated requirements for USPS to pre-fund retiree health benefits for current and retired employees for 75 years, a requirement no business or other federal entity faces. Steiner’s predecessor, Louis DeJoy, told Congress in 2021 the postal service was on a “death spiral” without reforms.
(Reporting by David Shepardson in Washington and Aishwarya Jain in Bengaluru; Editing by Sahal Muhammed and David Gregorio)
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