The U.S. Postal Service (USPS) is looking to increase revenue from its ‘last-mile’ delivery network to major retailers and shippers. The agency warned of a looming financial crunch, indicating it could run out of cash as early as 2027. Postmaster General David Steiner said he hopes companies like Amazon will participate in a bidding process to open 18,000 USPS delivery destination units for ‘last-mile’ deliveries to a wider customer base, potentially adding billions in revenue.
The USPS delivers to over 170 million U.S. addresses six days a week, with the last-mile being the most expensive part of the delivery process. Steiner stated that USPS has a precarious cash position and could be out of funds within 12 to 24 months, projecting a cash depletion by early 2027 if current practices continue. The USPS needs administrative and legislative reforms after reporting a $9 billion yearly loss in November, urging Congress to lift the $15 billion borrowing cap.
According to the Government Accountability Office, USPS net losses have totalled $118 billion since 2007. First-class mail volume, its most profitable product, has fallen to its lowest level since 1967. Steiner noted the USPS is currently selling about 1.7 billion units of capacity from its last-mile distribution, generating $5.5 to $6 billion in annual revenue. The agency has a capacity for 3.5 to 4 billion units.
The U.S. Postal Service delivers mail and packages to homes and businesses across the United States. Amazon is in discussions with USPS about their future relationship, considering options before their current contract expires in October. Steiner emphasized the need for dramatic and fast action, stating that the fate of USPS is intertwined with that of Amazon, which relies on the Postal Service for 1.7 billion package deliveries annually.
