USPS Cash Crisis Threatens Last-Mile Delivery; Federal Aid Sought

S. Postal Service confronts an acute financial crisis that threatens to destabilize last-mile delivery networks serving millions of American businesses and consumers. 9 billion in unrestricted cash, and projections showing cash depletion between 2031 and mid-2034, the agency is borrowing from employee retirement funds to maintain operations—a practice Postmaster General David Steiner characterized as unsustainable.

The core problem is structural: mail volume has halved since 2000 while the service footprint expands by 1 million addresses annually, creating an $81 billion revenue gap at current stamp prices. For supply chain professionals, this crisis poses immediate and strategic risks. A postal service shutdown would disrupt billions of dollars in parcel shipments, create last-mile bottlenecks, and force retailers and ecommerce operators to rely more heavily on FedEx and UPS, driving up delivery costs industry-wide.

USPS already imposed an 8% parcel surcharge in response to rising transportation costs, and proposed raising First-Class stamps to 82 cents—price increases that will compress margins in price-sensitive segments like catalog marketing and SME fulfillment. The agency's proposed solutions—raising borrowing authority, consolidating distribution centers, cutting delivery days, and closing thousands of post offices—will reshape shipping options available to small and mid-sized businesses that depend on USPS pricing to remain competitive. Congress must balance universal service mandates against financial viability, but the timeline is critical: legislative reform must arrive before 2031 to prevent operational disruption.