The U.S. Postal Service (USPS) cannot rely solely on cost-cutting measures to resolve its financial difficulties, according to Postmaster General David Steiner. Speaking at a Postal Board of Governors meeting in Washington, Steiner emphasized the need for revenue growth and leveraging the agency’s nationwide delivery network.
“I’ve taken to saying that we cannot cost-cut our way to prosperity,” Steiner said. “We have to grow.”
Steiner outlined plans for expanding USPS’s role in last-mile delivery—the final stage of getting packages to homes and businesses—which is typically the most expensive part of shipping. He noted ongoing negotiations with private parcel companies such as UPS and similar firms, aiming to broaden USPS’s last-mile service offerings. Additionally, he stated that USPS is seeking partnerships with both large and small retailers for same-day and next-day delivery services.
“We’ve begun discussions with a number of retailers and the desire for fast, reliable and affordable delivery is certainly strong among all retailers,” he said. “Our value resides in going to every address six and often seven days a week while offering a remarkable retail and processing footprint.”
Steiner took over as postmaster general in July after serving as a board member at FedEx.
Financial challenges remain significant for the postal service. The latest financial report shows operating revenue reached $80.5 billion, up by $916 million from the previous fiscal year, but net losses totaled $9 billion—a slight improvement from last year’s $9.5 billion loss.
Amber McReynolds, re-elected chair of the Postal Board of Governors, highlighted structural issues affecting USPS finances. She pointed out that current regulations require USPS to pay more into its retiree system than other federal agencies and restrict investment options for postal retirement funds exclusively to treasury securities.
“Long-standing and unnecessary restrictions are weighing down USPS’s bottom line and highlight the urgent need for executive and legislative action so the postal service can be financially sustainable for the long-term,” McReynolds said.
She also called on Congress to update rules regarding pricing systems, workers’ compensation programs, and borrowing limits—none of which have changed since 1991.
“This is urgent and it is time for action,” she said.
Steiner added that efficiency improvements are necessary alongside revenue growth. He mentioned adopting innovative methods such as artificial intelligence within logistics operations but stressed that capital investment would be needed: “To do all of this, we need capital and the ability to leverage our assets,” he said. “We should be able to borrow like our competitors, who are not limited by statute.”
Steiner confirmed his intention to continue with much of his predecessor Louis DeJoy’s $40 billion ten-year modernization plan aimed at stabilizing finances and updating infrastructure. He reported improvements in on-time mail delivery—with most customers now receiving mail or packages within three days—and stated further progress was required.
With peak holiday season approaching, Steiner expressed confidence in readiness due partly to investments totaling $20 billion over four years in processing modernization; only about 14,000 seasonal employees will be hired due to workforce stabilization efforts.
Concerns about possible privatization were raised during Friday’s meeting—a topic previously suggested by President Donald Trump and former adviser Elon Musk—but McReynolds dismissed these suggestions.
