Early in March of this year, the US Postal Service (USPS) signed an agreement with the Department of Government Efficiency (DOGE) in regard to cost savings and eliminating waste. The news came in a March 13 letter sent by Postmaster General Louis DeJoy to congressional leaders. He cited a cost-cutting initiative that includes a reduction of 10,000 USPS workers (out of a workforce of 635,000 employees) through a voluntary early retirement program. The agreement with DOGE raises questions about the future of the USPS and follows the news from mid-February when DeJoy notified the Postal Service Board of Governors that he would be leaving as Postmaster and that they should begin the process of identifying his successor. He officially resigned on March 24th.

Outgoing Postmaster General Louis DeJoy’s Wish List

Appointed during Donald Trump’s first administration, DeJoy has headed the USPS for five years. The USPS is now into the fourth year of his “Delivering for America” plan, a ten-year timetable intended to put the agency on “a path toward financial sustainability and operational high performance.” As he departs, at the top of DeJoy’s list are changes to:

• USPS retirement assets: DeJoy cites the mismanagement of the Postal Service’s self-funded retirement assets and the actuarial miscalculations of its retirement obligations, which he says result in several billion dollars a year in additional charges. Any changes would need to be addressed by the Office of Personal Management and the Treasury Department and relate to legislation enacted by the Congress.
• The investment of USPS retirement funds: These are currently invested in US Treasury bonds, but could benefit from higher-yielding investment opportunities.
• The USPS Workers' Compensation Program: DeJoy notes that the mismanagement of this results in approximately $400 million a year in excessive charges. He says that this could be resolved by the Department of Labor through Congressional legislation.
• Unfunded mandates: Imposed by legislation, these require the USPS to provide services without any supporting funding. DeJoy estimates that this costs the USPS between $6 billion and $11 billion annually.
• The Postal Regulatory Commission (PRC): DeJoy does not believe that the PRC is necessary and states that it has caused more than $50 billion in damage to the USPS through defective pricing models and onerous bureaucratic processes. In response, the PRC said that the commission does not have control over the price cap, which is governed by law.

These wish list items line up closely with DeJoy’s message in November when he spoke about the USPS’s fiscal 2024 results. One important point he made at the time was that nearly 80% of the USPS’s fiscal woes could be solved by legislative action. That, however, seems unlikely to happen anytime soon.

Conclusion

The agreement with DOGE and DeJoy’s departure will bring in a new era for the USPS. One would have thought that DeJoy, as a Trump appointee, might have had some level of job security in a second Trump administration. DeJoy’s decision to leave throws his whole Delivering for America plan into question. With legislative action unlikely and DOGE strategies more aligned to cutting and slashing, this leaves the USPS in a precarious position at a time when talks of privatization come back around and with DOGE axes at the ready.

Let’s not forget the USPS’s universal service obligation “to provide prompt, reliable, affordable, and efficient postal services to all Americans, regardless of where they live” (and without tax dollars to fund that obligation). It seems unlikely that any private entity would have an appetite to take on all of these needs. This is particularly the case with rural deliveries, which are never going to be moneymakers.

Author bio: Jim Hamilton of Green Harbor Publications (www.greenharbor.com) is an industry analyst, market researcher, writer, and public speaker. For many years he was Group Director in charge of Keypoint Intelligence’s (formerly InfoTrends’) Production Digital Printing & Publishing consulting services. He has a BA in German from Amherst College and a Master’s in Printing Technology from the Rochester Institute of Technology.