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LOGISTICS |
Carrier Strategy Brief |
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Parcel Pricing Outlook
USPS Posts $9 Billion Loss
The Postal Regulatory Commission has reported another difficult year for the U.S. Postal Service. USPS recorded a $2.7 billion operating loss in fiscal year 2025, with a total net loss of roughly $9 billion after non-operating expenses. For parcel shippers, this is an early signal of continued pressure on rates, service design, and carrier strategy. |
$2.7B
FY 2025 operating loss |
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~$9B
Total net loss after non-operating expenses |
Source: Postal Regulatory Commission, FY 2025 Financial Analysis of the U.S. Postal Service (PDF). |
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FY 2025 at a Glance
A decade without a profitable year, and the pressure is still building. |
3.7%
Total volume decline |
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2.1%
Drop in Total Factor Productivity |
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15.2%
Market Dominant price increase |
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$15B
Borrowing limit, fully maxed |
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+5M
Additional overtime hours used |
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−15K
Decline in headcount |
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The Core Issue Is Structural
USPS generated more revenue in FY 2025, but did not convert that growth into profitability. Operating revenue rose roughly $1 billion, while operating expenses climbed by $1.7–$1.8 billion. Pricing alone has not closed the gap. |
Revenue vs. Expenses, FY 2025
Operating Revenue
Operating Expenses
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▶ The $2.9B gap is the story, expense growth is outpacing revenue gains. |
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A Shift From Air to Ground
USPS moved more packages off air and onto highway transportation. That can lower internal cost, but it can also reshape time-in-transit. |
▼ 18%
Air transportation costs fell nearly 18% |
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▲ 1%
Highway transportation costs rose about 1% |
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Labor Remains the Largest Pressure Point
Nearly 70% of USPS expenses are employee pay and benefits. Even as headcount and total workhours fell, the agency leaned on 5 million more overtime hours to keep the network moving. |
Share of total USPS expenses
| Pay & Benefits, 70% |
Other, 30% |
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What This Means for You
Impact on Parcel Shippers
| 01 |
Treat this as a pricing signal. USPS still needs revenue growth, raising the risk of future rate increases, surcharge expansion, and tighter product economics. Do not assume USPS pricing will stay a stable cost anchor. |
| 02 |
Watch the air-to-ground shift. It may lower USPS internal cost, but monitor service performance by zone, lane, and product. Savings inside USPS do not always reach the shipper. |
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Benchmark Ground Advantage. It remains strategically important, but measure it against UPS, FedEx, regional carriers, and consolidators. The right answer varies by package profile. |
| 04 |
Build carrier optionality now. Financial pressure can affect pricing, service commitments, and network design. Shippers need diversification before changes arrive, not after. |
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Key Takeaways |
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USPS reported a $2.7 billion operating loss. |
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Total net loss reached approximately $9 billion. |
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Operating expenses reached $83.5 billion. |
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Total volume declined 3.7%; productivity fell 2.1%. |
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USPS stayed at its full $15 billion borrowing limit. |
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Air transportation costs fell ~18%; highway costs rose ~1%. |
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Labor remains the largest cost driver, review USPS dependency now. |
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How ebb Logistics Can Help
ebb Logistics helps parcel shippers turn carrier market signals into action. We evaluate how USPS pricing, service changes, and network shifts affect your parcel spend, then benchmark USPS against UPS, FedEx, regional carriers, and consolidators for a clear view of the tradeoffs.
We identify exposure across base rates, accessorials, surcharges, zones, and package characteristics, then build a carrier strategy around your actual shipping profile to improve leverage, reduce dependency, and protect service performance.
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