Postal Service Boosts Revenue by Selling Access to Final-Leg Delivery Network

The U.S. Postal Service (USPS) has announced a significant move to enhance its last-mile delivery network. This initiative aims to bolster revenue for the agency, which has been facing financial challenges.

Last-Mile Delivery Network Expansion

Postmaster General Louis Steiner stated that the most expensive segment of delivery is typically the last mile. USPS currently services over 170 million addresses at least six days per week, positioning it as a leader in the last-mile delivery sector.

Auctioning Delivery Access

Beginning in late January or early February 2026, USPS will auction access to more than 18,000 delivery destinations. Steiner mentioned that this initiative could generate billions in revenue, which is crucial for the agency facing potential financial hardship.

• USPS reported a net loss of $9 billion in fiscal 2025.
• By early 2027, USPS could run out of funds without additional revenue.

At a board of governors meeting on November 14, Steiner emphasized the need to grow, stating, “We cannot cost-cut our way to prosperity.” This reflects a shift towards enhancing business access to USPS’s services across the country.

Challenges and Opportunities

Although USPS has historically engaged in last-mile deliveries for private companies, access has been limited to a select few. Reports indicate that Amazon may not renew its contract with USPS in 2026, which could affect USPS revenue significantly. In 2025, Amazon contributed over $6 billion to the agency’s annual revenue.

USPS is currently pursuing its 10-year modernization initiative called Delivering for America. Previously, Louis DeJoy, the former postmaster general, anticipated that this plan would allow the agency to break even by fiscal 2023. However, despite price increases and slower delivery times, this goal has not yet been achieved.

Calls for Legislative Support

Steiner has expressed that continued implementation of the Delivering for America plan is essential, despite bipartisan requests to pause the initiative. Additionally, a recent report by the Government Accountability Office criticized USPS for its lack of near-term financial projections within its 2024 strategic plan.

• Without clear financial targets, progress and sustainability are difficult to measure.
• USPS may need Congressional support to achieve financial autonomy.

Steiner also advocated for raising the agency’s $15 billion statutory debt limit during discussions in the board meeting and in interviews. This reform could provide USPS with additional flexibility to address its financial challenges as it navigates an evolving delivery landscape.