As Postal Service Financial Struggles Remain, Will Trump Push for Privatization?

As President-elect Donald Trump prepares for his second term effective January 20, 2025, the financial state of the U.S. Postal Service will certainly face scrutiny in the coming months and years. Aside from Congressional oversight, the new Department of Government Efficiency (DOGE) advisory commission, led by Elon Musk and Vivek Ramaswamy, may very well put the Postal Service in its crosshairs. 

After all, given Trump ran his re-election campaign partially on the promise of cutting federal spending and waste to help lower the ballooning federal deficit, another major Postal Service bailout seems unlikely. Despite receiving $107 billion in assistance due to the 2022 Postal Reform Act, $10 billion in Covid money as part of the CARES Act, and $3 billion from the Biden-Harris Inflation Reduction Act to fund a 10-year plan to shift to electric vehicles, the USPS continues to incur unsustainable losses. 

In its Fiscal Year (FY) 2024 report, the Postal Service indicated a $9.52 billion loss — including an overall negative net worth of $32.63 billion. The agency is also projecting a $6.9 billion net loss for FY 2025, despite several rounds of postal rate hikes that have far outpaced inflation in combination with lowered delivery service standards. 

Even though Trump remarked during a December 16, 2024 press conference that privatization of the agency is “not the worse idea of I’ve ever heard,” with USPS's poor financial balance sheet, it seems unlikely. Its comparatively high union wages and benefits structure and its long-term retiree obligations make the Postal Service, as a whole, undesirable to private investors.  

And, despite the importance of its First Class (its most profitable) and Marketing Mail, the Postal Service has focused on growing its Shipping and Packages services, even though it reported that amounted to $1.4 billion less in revenue than it had projected for FY 2024. Its mandate to deliver to very household across America, in part, puts it at a competitive pricing and profitability disadvantage. 

By contrast, revenue from Marketing Mail was $15.4 billion, above the agency’s projected amount by $0.8 billion, “primarily due to the impact of the general elections and an expanded U.S. advertisements market,” according to its FY 2024 report. 

Combined Public-Private Model 

One idea floating is that Trump will push for a public-private partnership model during his second term. It would likely entail the USPS outsourcing certain services in densely populated urban and suburban areas of the country. This would reportedly improve efficiencies and delivery times within those areas. 

To compete more effectively with private sector giants like FedEX and UPS, new enhancements would also include premium delivery options, more enhanced tracking, and more streamlined logistics aided by emerging AI technology. And, to better align with market rates, shipping fees for bulk packages, especially, would be adjusted — much to the benefit of small businesses. 

Not surprisingly, congressional representatives from rural districts have already voiced their concerns about potential privatization of the USPS, arguing that private entities would only vie for more profitable, highly populated areas, leading to service disruptions for sparsely populated regions. As expected, postal unions have also rejected the public-private concept, largely based on fears of resultant unionized worker layoffs. 

Not the First Time Privatization Idea Floated 

Privatization was also an idea under consideration during Trump’s first term. Back in 2018, he created a task force to recommend how to put the Postal Service on a better financial footing. As a result, the Office of Management and Budget indicated cost-cutting moves be instituted at the Postal Service to clean up its balance sheet, so it could become a stronger candidate to be sold to private investors. 

In 2018, the White House proposal indicated that “a privatized Postal Service would have a substantially lower cost structure, be able to adapt to changing customer needs and make business decisions free from political interference and have access to private capital markets to fund operational improvements without burdening taxpayers. The private operation would be incentivized to innovate and improve services to Americans in every community.” 

But those proposals received strong bipartisan Congressional kickback back in 2018, so they were never implemented.  

It remains to be seen what the mood in Congress will be should another bailout become necessary during Trump’s second term in office. In addition, it may depend on how much real influence the new DOGE commission will have to help institute radical reforms. As a savvy businessman, Trump is also likely positioning himself to threaten radical Postal Service reform in order to secure more widespread Congressional support coupled with concessions from the Postal Service’s labor unions. 

The current and future state of the U.S. Postal Service remains a far cry from its conception with the Second Continental Congress and Benjamin Franklin in 1775, which continued in 1787 with the Postal Clause of the U.S. Constitution that empowered Congress to establish post offices and to post roads. 

Like the ingenuity that Ben Franklin displayed throughout his lifetime, solving the dilemma of a failing Postal Service may very well require similar inventiveness and imagination. Given that so much printed matter enters the U.S. postal stream, the fate of many sectors of the printing industry also hangs in the balance.