The United States Postal Service (USPS; also known as the Post Office, U.S. Mail, or Postal Service) is an independent agency of the executive branch of the United States federal government responsible for providing postal service in the United States, including its insular areas and associated states. It is one of the few government agencies explicitly authorized by the United States Constitution. The USPS, as of 2021, has 516,636 career employees and 136,531 non-career employees.
The USPS traces its roots to 1775 during the Second Continental Congress, when Benjamin Franklin was appointed the first postmaster general; he also served a similar position for the colonies of the Kingdom of Great Britain. The Post Office Department was created in 1792 with the passage of the Postal Service Act. It was elevated to a cabinet-level department in 1872, and was transformed by the Postal Reorganization Act of 1970 into the United States Postal Service as an independent agency. Since the early 1980s, many direct tax subsidies to the USPS (with the exception of subsidies for costs associated with disabled and overseas voters) have been reduced or eliminated.
The USPS has a monopoly on “letter” delivery within the United States and operates under a universal service obligation (USO), both of which are defined across a broad set of legal mandates, which obligate it to provide uniform price and quality across the entirety of its service area. The Post Office has exclusive access to letter boxes marked “U.S. Mail” and personal letterboxes in the United States, but has to compete against private package delivery services, such as United Parcel Service, FedEx, and Amazon.
On March 18, 1970, postal workers in New York City—upset over low wages and poor working conditions, and emboldened by the Civil Rights Movement—organized a strike against the United States government. The strike initially involved postal workers in only New York City, but it eventually gained support of over 210,000 United States Post Office Department workers across the nation. While the strike ended without any concessions from the Federal government, it did ultimately allow for postal worker unions and the government to negotiate a contract which gave the unions most of what they wanted, as well as the signing of the Postal Reorganization Act by President Richard Nixon on August 12, 1970. The act replaced the cabinet-level Post Office Department with a new federal agency, the United States Postal Service, and took effect on July 1, 1971.
Operation and budget
In Fiscal Year 2021, the Postal Service had $77.06 billion in revenue and expenses of $81.99 billion with a net loss of $4.93 billion.
Revenue decline and planned cuts
In 2016, the USPS had its fifth straight annual operating loss, in the amount of $5.6 billion, of which $5.8 billion was the accrual of unpaid mandatory retiree health payments.
Declining mail volume
First-class mail volume peaked in 2001 to 103.65 billion declining to 52.62 billion by 2020 due to the increasing use of email and the World Wide Web for correspondence and business transactions. USPS also almost delivered the first email but did not do so.
Private courier services, such as FedEx and United Parcel Service (UPS), directly compete with USPS for the delivery of urgent letters and packages.
Lower volume means lower revenues to support the fixed commitment to deliver to every address once a day, six days a week. According to an official report on November 15, 2012, the U.S. Postal Service lost $15.9 billion its 2012 fiscal year.
Internal streamlining and delivery slowdown
In response, the USPS has increased productivity each year from 2000 to 2007, through increased automation, route re-optimization, and facility consolidation. Despite these efforts, the organization saw an $8.5 billion budget shortfall in 2010, and was losing money at a rate of about $3 billion per quarter in 2011.
On December 5, 2011, the USPS announced it would close more than half of its mail processing centers, eliminate 28,000 jobs and reduce overnight delivery of First-Class Mail. This will close down 252 of its 461 processing centers. (At peak mail volume in 2006, the USPS operated 673 facilities.) As of May 2012, the plan was to start the first round of consolidation in summer 2012, pause from September to December, and begin a second round in February 2014; 80% of first-class mail would still be delivered overnight through the end of 2013. New delivery standards were issued in January 2015, and the majority of single-piece (not presorted) first-class mail is now being delivered in two days instead of one. Large commercial mailers can still have first-class mail delivered overnight if delivered directly to a processing center in the early morning, though as of 2014 this represented only 11% of first-class mail. Unsorted first-class mail will continue to be delivered anywhere in the contiguous United States within three days.
Post office closures
In July 2011, the USPS announced a plan to close about 3,700 small post offices. Various representatives in Congress protested, and the Senate passed a bill that would have kept open all post offices farther than 10 miles (16 km) from the next office. In May 2012, the service announced it had modified its plan. Instead, rural post offices would remain open with reduced retail hours (some as little as two hours per day) unless there was a community preference for a different option. In a survey of rural customers, 54% preferred the new plan of retaining rural post offices with reduced hours, 20% preferred the “Village Post Office” replacement (where a nearby private retail store would provide basic mail services with expanded hours), 15% preferred merger with another Post Office, and 11% preferred expanded rural delivery services. Approximately 40% of postal revenue already comes from online purchases or private retail partners including Walmart, Staples, Office Depot, Walgreens, Sam’s Club, Costco, and grocery stores. The National Labor Relations Board agreed to hear the American Postal Workers Union’s arguments that these counters should be staffed by postal employees who earn far more and have “a generous package of health and retirement benefits”.
Elimination of Saturday delivery averted
On January 28, 2009, Postmaster General John E. Potter testified before the Senate that, if the Postal Service could not readjust its payment toward the contractually funding earned employee retiree health benefits, as mandated by the Postal Accountability & Enhancement Act of 2006, the USPS would be forced to consider cutting delivery to five days per week during June, July, and August.
H.R. 22, addressing this issue, passed the House of Representatives and Senate and was signed into law on September 30, 2009. However, Postmaster General Potter continued to advance plans to eliminate Saturday mail delivery.
On June 10, 2009, the National Rural Letter Carriers’ Association (NRLCA) was contacted for its input on the USPS’s current study of the effect of five-day delivery along with developing an implementation plan for a five-day service plan. A team of Postal Service headquarters executives and staff was given a time frame of sixty days to complete the study. The current concept examines the effect of five-day delivery with no business or collections on Saturday, with Post Offices with current Saturday hours remaining open.
On Thursday, April 15, 2010, the House Committee on Oversight and Government Reform held a hearing to examine the status of the Postal Service and recent reports on short and long-term strategies for the financial viability and stability of the USPS entitled “Continuing to Deliver: An Examination of the Postal Service’s Current Financial Crisis and its Future Viability”. At which, PMG Potter testified that by the year 2020, the USPS cumulative losses could exceed $238 billion, and that mail volume could drop 15 percent from 2009.
In February 2013, the USPS announced that in order to save about $2 billion per year, Saturday delivery service would be discontinued except for packages, mail-order medicines, Priority Mail, Express Mail, and mail delivered to Post Office boxes, beginning August 10, 2013. However, the Consolidated and Further Continuing Appropriations Act, 2013, passed in March, reversed the cuts to Saturday delivery.
Retirement funding and payment defaults
The Postal Accountability and Enhancement Act of 2006 (PAEA) obligates the USPS to fund the present value of earned retirement obligations (essentially past promises which have not yet come due) within a ten-year time span. In contrast, private businesses in the United States have no legal obligation to pay for retirement costs at promise-time rather than retirement-time, but about one quarter do.
The Office of Personnel Management (OPM) is the main bureaucratic organization responsible for the human resources aspect of many federal agencies and their employees. The PAEA created the Postal Service Retiree Health Benefit Fund (PSRHB) after Congress removed the Postal Service contribution to the Civil Service Retirement System (CSRS). Most other employees that contribute to the CSRS have 7% deducted from their wages. Currently, all new employees contribute into Federal Employee Retirement System (FERS) once they become a full-time regular employees.
Running low on cash, in order to continue operations unaffected and continue to meet payroll, the USPS defaulted for the first time on a $5.5 billion retirement benefits payment due Aug 1, 2012, and a $5.6 billion payment due September 30, 2012.
On September 30, 2014, the USPS failed to make a $5.7 billion payment on this debt, the fourth such default. In 2017, the USPS defaulted on some of the last lump-sum payments required by the 2006 law, though other payments were also still required.
On February 5, 2020, the House passed The USPS Fairness Act (H.R. 2382) with a more than two-thirds majority (309 to 106).The measure would eliminate the requirement going forward and forgive all payments on which USPS has defaulted. It was forwarded to the Senate on February 10, 2020, and is awaiting action by senators.
Congress has limited rate increases for First-Class Mail to the cost of inflation, unless approved by the Postal Regulatory Commission. A three-cent surcharge above inflation increased the 1 oz (28 g) rate to 49¢ in January 2014, but this was approved by the commission for two years only. As of August 29th, 2021, first-class postage for up to 1 ounce is $0.58.
Reform proposals and delivery changes
During the Obama administration
Comprehensive reform packages considered in the 113th Congress include S.1486 and H.R.2748. These include the efficiency measure, supported by Postmaster General Patrick Donahoe of ending door-to-door delivery of mail for some or most of the 35 million addresses that currently receive it, replacing that with either curbside boxes or nearby “cluster boxes”. This would save $4.5 billion per year out of the $30 billion delivery budget; door-to-door city delivery costs annually on average $353 per stop, curbside $224, and cluster box $160 (and for rural delivery, $278, $176, and $126, respectively).
S.1486, also with the support of Postmaster Donahoe, would also allow the USPS to ship alcohol in compliance with state law, from manufacturers to recipients with ID to show they are over 21. This is projected to raise approximately $50 million per year. (Shipping alcoholic beverages is currently illegal under 18 U.S.C. § 1716(f).)
In 2014, the Postal Service was requesting reforms to workers’ compensation, moving from a pension to defined contribution retirement savings plan, and paying senior retiree health care costs out of Medicare funds, as is done for private-sector workers.
During the Trump administration
As part of a June 2018 governmental reorganization plan, the Donald Trump administration proposed turning USPS into “a private postal operator” which could save costs through measures like delivering mail fewer days per week, or delivering to central locations instead of door to door. There was strong bipartisan opposition to the idea in Congress.
In April 2020, Congress approved a $10 billion loan from the Treasury to the post office. According to the Washington Post, officials under Treasury Secretary Steven Mnuchin suggested using the loan as leverage to give the Treasury Department more influence on USPS operations, including making them raise their charges for package deliveries, a change long sought by President Trump.
In May 2020, in a controversial move, President Trump appointed a new Postmaster General, Louis DeJoy, the first postmaster in the last two decades who had no prior experience within the United States Postal Service.
DeJoy — until 2014 CEO of New Breed Logistics (a controversial Postal Service contractor), and until 2018 a board member its new parent, XPO Logistics, whose postal contracts expanded during DeJoy’s postmaster role — was a major donor and fundraiser for the Republican Party (from 2017, a deputy finance chairman of the Republican National Committee, until appointed postmaster, and later million-dollar donor to the 2020 Trump campaign while postmaster).
DeJoy immediately began taking measures to reduce costs, such as banning overtime and extra trips to deliver mail. While DeJoy admitted that these measures were causing delays in mail delivery, he said they would eventually improve service.
More than 600 high-speed mail sorting machines were scheduled to be dismantled and removed from postal facilities, raising concerns that mailed ballots for the November 3 election might not reach election offices on time.
Mail collection boxes were removed from the streets in many cities; after photos of boxes being removed were spread on social media, a postal service spokesman said they were being moved to higher traffic areas but that the removals would stop until after the election.
The inspector general for the postal service opened an investigation into the recent changes. On August 16 the House of Representatives was called back from its summer recess to consider a bill rolling back all of the changes.
On August 18, 2020, after days of heavy criticism and the day after lawsuits against the Postal Service and DeJoy personally were filed in federal court by several individuals, DeJoy announced that he would roll back all the changes until after the November election. He said he would reinstate overtime hours, roll back service reductions, and halt the removal of mail-sorting machines and collection boxes. However, 95 percent of the mail sorting machines that were planned for removal had already been removed, and according to House Speaker Nancy Pelosi, DeJoy said he has no intention of replacing them or the mail collection boxes.
Voting by mail has become an increasingly common practice in the United States, with 25% of voters nationwide mailing their ballots in 2016 and 2018. The coronavirus pandemic of 2020 was predicted to cause a large increase in mail voting because of the possible danger of congregating at polling places. For the 2020 election, a state-by-state analysis concluded that 76% of Americans were eligible to vote by mail in 2020, a record number. The analysis predicted that 80 million ballots could be cast by mail in 2020 – more than double the number in 2016. The Postal Service sent a letter to 46 states in July 2020, warning that the service might not be able to meet the state’s deadlines for requesting and casting last-minute absentee ballots.
The House of Representatives voted to include an emergency grant of $25 billion to the post office to facilitate the predicted flood of mail ballots. Trump conceded that the post office would need additional funds to handle the additional mail-in voting, but said he would oppose any additional funding so that “universal mail-in voting” would not be possible. On August 14, 2020, President Trump said he was willing to approve USPS funding if concessions were made to some funding asks in coronavirus relief package.
The United States Postal Service (USPS) delivered 11.52 billion pounds (5.23 million tonnes) of paper in Financial Year 2019, taking into account First Class, Marketing Mail, and Periodicals. At 17 mature trees per ton of paper, nearly 98 million trees were cut down for the 11.5 billion pounds of paper (assuming that is not recycled paper) delivered by USPS in 2019. It uses a delivery fleet exceeding 200,000 vehicles, responsible for producing 1.7 million metric tonnes of carbon dioxide equivalent greenhouse gases in 2018. With USPS releasing 1.7 million metric tons of CO2 in 2018 and a mature tree absorbing 48 pounds (22 kg) of carbon dioxide in a year, we would need 78 million trees to absorb USPS’ CO2 produced annually.
Governance and organization
The Board of Governors of the United States Postal Service sets policy, procedure, and postal rates for services rendered. It has a similar role to a corporate board of directors. Of the eleven members of the Board, nine are appointed by the president and confirmed by the United States Senate (see 39 U.S.C. § 202). The nine appointed members then select the United States postmaster general, who serves as the board’s tenth member, and who oversees the day-to-day activities of the service as chief executive officer (see 39 U.S.C. §§ 202–203). The ten-member board then nominates a deputy postmaster general, who acts as chief operating officer, to the eleventh and last remaining open seat.
The independent Postal Regulatory Commission (formerly the Postal Rate Commission) is also controlled by appointees of the president confirmed by the Senate. It oversees postal rates and related concerns, having the authority to approve or reject USPS proposals.
The USPS is often mistaken for a state-owned enterprise or government-owned corporation (e.g., Amtrak) because it operates much like a business. It is, however, an “establishment of the executive branch of the Government of the United States”, (39 U.S.C. § 201) as it is controlled by presidential appointees and the postmaster general. As a government agency, it has many special privileges, including sovereign immunity, eminent domain powers, powers to negotiate postal treaties with foreign nations, and an exclusive legal right to deliver first-class and third-class mail. Indeed, in 2004, the U.S. Supreme Court ruled in a unanimous decision “The Postal Service is not subject to antitrust liability. In both form and function, it is not a separate antitrust person from the United States but is part of the Government, and so is not controlled by the antitrust laws” such as the Sherman Antitrust Act. Unlike a state-owned enterprise, the USPS lacks a transparent ownership structure and isn’t subject to standard rules and norms that apply to commercial entities. The USPS also lacks commercial discretion and control.
The U.S. Supreme Court has also upheld the USPS’s statutory monopoly on access to letter boxes against a First Amendment freedom of speech challenge; it thus remains illegal in the U.S. for anyone, other than the employees and agents of the USPS, to deliver mailpieces to letter boxes marked “U.S. Mail”.
The Postal Service also has a Mailers’ Technical Advisory Committee and local Postal Customer Councils, which are advisory and primarily involve business customers.
Since the 1990s, Republicans have been discussing the idea of privatizing the U.S. Postal Service. President Donald Trump‘s administration proposed turning USPS into “a private postal operator” as part of a June 2018 governmental reorganization plan, although there was strong bipartisan opposition to the idea in Congress.
On December 17, 2017, President Donald Trump criticized the postal service’s relationship with Amazon. In a post on Twitter, he stated: “Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!” Amazon maintains that the Postal Service makes a profit from its contract with the company. On June 21, 2018, Trump proposed a sweeping reorganization but Congress did not act.
Lisa Graves has documented decades-long efforts to privatize the U.S. Postal Service through driving the public service to financial collapse. The Council on Foreign Relations brings the argument to bring USPS online with a digital identity via an email address. USPS explored a digital identity using an email address in it “Digital Identity – Opportunities for the Postal Service” report in 2012.
See also: What is United States Postal Service?