PMG DECLARES CASH CRISIS; LOSES NARROW IN SECOND QUARTER

“It is a simple fact that we are in a cash crisis, and we are now taking serious and appropriate steps to conserve funds to operate.” — PMG Steiner

WASHINGTON, DC — The U.S. Postal Service today announced its financial results for the second quarter of fiscal year 2026 (Jan. 1, 2026 – Mar. 31, 2026). Controllable loss, which excludes certain expenses that are not controllable by management, was $642 million for the quarter, compared to controllable loss of $848 million for the same quarter last year.

Total operating revenue was $20.2 billion for the quarter, an increase of $463 million, or 2.3 percent, compared to the same quarter last year. The increase was largely due to price increases in the Shipping and Packages, Marketing Mail, and First-Class Mail categories, partially offset by declining volumes for these same categories.

Shipping and Packages revenue increased $348 million, or 4.5 percent, on a volume decline of 22 million pieces, or 1.4 percent, compared to the same quarter last year. Marketing Mail revenue increased $210 million, or 5.7 percent, on a volume decline of 113 million pieces, or 0.9 percent, compared to the same quarter last year. First-Class Mail revenue deceased $31 million, or 0.5 percent, on a volume decline of 691 million pieces, or 6.3 percent, compared to the same quarter last year.

Net loss for the quarter under generally accepted accounting principles (GAAP) totaled $2.0 billion, compared to $3.3 billion for the same quarter last year. This $1.3 billion decrease is attributed to an operating revenue increase of $463 million and a decrease in workers’ compensation expense of $1.3 billion, partially offset by an increase in retiree health benefits expense of $175 million and higher other operating expenses of $72 million.

“During the quarter we were able to get revenue, cost and service results moving in the right direction,” said U.S. Postmaster General David Steiner. “However, the scale of our financial improvements compared to the prior year was modest and we have a long road to go to achieve anything close to long-term financial sustainability. It is a simple fact that we are in a cash crisis, and we are now taking serious and appropriate steps to conserve funds to operate. To avoid disruption and to sustain our role supporting American commerce and the public, we require urgent Congressional action to expand our borrowing authority and to address outdated constraints on the organization.”

On April 9, 2026, the Postal Regulatory Commission (PRC) granted a Temporary Conditional Waiver that lifts regulatory restrictions that required the Postal Service to use cash generated through the retirement-based rate authority only to make a minimum remittance payment towards our pension amortization obligations. The Postal Service will determine whether to exercise the authority provided by the Temporary Conditional Waiver later this year. PRC rules, therefore, allow this cash to be used on expenditures for operating expenses and capital investments, if we meet the conditions of the waiver.

While the waiver is appreciated, the Postal Service continues to urge the PRC to prioritize its long-term financial sustainability, as required by law, and act on its previous petition for certain regulatory changes, including: modification of the Market Dominant ratemaking system through the elimination of the price cap and adoption of a regulatory monitoring ratemaking system in order to help achieve a sustainable path. Alternatively, if the price cap is maintained, the PRC should allow a re-baselining of rates to ensure they are compensable while also maintaining adjustment factors that ensure the system is flexible enough to deal with external circumstances that may arise.

In addition to the temporary regulatory relief, the Postal Service suspended its portion of payments to the Office of Personnel Management for the bi-weekly normal cost contributions for employees covered under FERS effective April 10, 2026, enabling it to address its immediate liquidity issue by conserving approximately $200 million in cash each pay period and approximately $2.5 billion for the remainder of fiscal year 2026.

Total operating expenses decreased $949 million, or 4.1 percent, to $22.1 billion for the quarter, compared to the same quarter last year. The overall decrease in operating expenses was primarily due to the impact of discount rates on workers’ compensation costs and the actuarial revaluation of existing workers’ compensation cases, partially offset by increases in retiree health benefits costs and other operating costs. Compensation and benefits, the largest expense component, was relatively flat compared to the same quarter last year as was transportation expense.

“The financial results for the quarter showed slight improvement compared to the same quarter last year, as we continued to grow revenue and aggressively manage the costs under our control, where possible, which kept two of our largest expense components, compensation and benefits and transportation, relatively flat,” said Chief Financial Officer Luke Grossmann. “However, management actions alone are not enough to solve our financial predicament. We remain confident that we can create a financially sustainable Postal Service through a combination of management actions and legislative, regulatory, and administrative reform.”