Is It Time to Privatize the USPS?

Here’s an idea: Let’s create a federally sponsored corporation to spend $89.5 billion a year moving stuff—mostly documents made of paper—from place to place. Let’s hire 635,000 people to do it, grant them expensive health and pension benefits such that personnel costs are 80 percent of the total, then make it almost impossible to lay them off.

Let’s keep doing so long after the service has been rendered technologically obsolete, and demand for it has cratered. In fact, let’s keep it up even though recipients have decided that nearly three-fifths of what we deliver to them is “junk” that they discard almost as soon as it arrives.

Insane, you say? Well, what you have just read is an accurate portrayal of the United States Postal Service, which lost $9.5 billion shuffling paper around the country in fiscal year 2024, while Americans sent one another six billion text messages daily. Half the people surveyed in 2021 hadn’t received a personal letter in five years; 14 percent had never received one.

And yes, 58 percent of the letters people do get is “marketing mail”—ads, catalogs, credit card offers—which the USPS handles for the private sector at a discount rate, even though the recipient’s mailbox is usually just a brief stop en route to the recycling bin.

So who could blame the postmaster general, Louis DeJoy, for resigning this week? He spent five years trying, with limited success, to reform the USPS, which has morphed from a national necessity to a national burden.

That may sound harsh. But I’ve covered the postal service’s woes off and on for more than a decade; if I’ve learned anything from that frustrating experience, it’s that there’s no future for this basket case of an agency without sweeping reforms—and full or partial privatization should be on the table.

In taking on the federal bureaucracy, DOGE has far too often wielded the proverbial axe instead of a scalpel. DeJoy’s resignation came days after he struck a deal with DOGE to involve it more deeply in postal cost-cutting—only to find himself accused of dragging his feet on the changes.

If there’s any part of the federal apparatus that could use a dose of radical disruption, though, it’s the postal service. DeJoy himself laid out the problems in a March 13 letter to congressional leaders, in which he decried the USPS’s “broken business model,” a reference to the fact that its former cash cow, a monopoly on first-class mail, has lost its value.

Also on DeJoy’s list: infrastructure “greatly deteriorated due to years of underinvestment”; $400 million in annual “mismanagement” of a worker compensation fund; unfunded mandates costing between $6 billion and $11 billion annually; and $50 billion in accumulated damage from the postal regulator’s “defective pricing models and decades old bureaucratic processes.”

The honesty is welcome. Lord knows there’s been enough happy talk, euphemisms, and nonsense propagated by those who, for whatever reason, want to perpetuate the untenable status quo.

My favorite was Bernie Sanders’ hyperbolic claim, apropos cost-cutting attempts under DeJoy in 2020: Alleged mail delays posed “a life-and-death situation,” the socialist senator asserted, in part because the USPS delivers Social Security checks to seniors who rely on those benefits to survive.

Actually, direct deposit accounts for more than 99 percent of Social Security benefits, due to a reform under President Obama that phased out paper checks. In other words, the federal government itself has been reducing its reliance on the postal service.

Come to think of it, the Environmental Protection Agency did groundbreaking research on the recycling burden of junk mail; another arm of the government, the Federal Trade Commission, offers postal customers help to “cut down on how much unsolicited mail you get.”

So there are more than a few contradictions in the left’s reflexive support for the postal service, generally portrayed in progressive narratives as an example of government at its nation-unifying best.

Liberal resistance to structural reform reflects the influence of powerful postal unions, a major Democratic Party constituency, more than high-minded principle. But businesses—junk mailers, printers, small-town newspaper publishers, package shippers—exercise as much or more influence over the agency, its regulators, and Congress as the unions.

The upshot is that a network of special interests pressures the postal service to keep rates low and service obligations high. The number of addresses the USPS is required to serve has grown from 154 million to 167 million over the last decade—despite steadily declining mail volume.

Postal lobbies defeated even such modest cost-cutting reforms as ending Saturday delivery or permitting the USPS to open branches in Staples stores and other commercial establishments.

Just as postal service reformers had warned, the USPS—which had long boasted of operating under a legal mandate to pay its own way—ended up needing $107 billion in taxpayer assistance from Congress in 2022.

This was supposed to clear the financial decks for DeJoy’s 10-year strategic revitalization plan, which did achieve some revenue gains and other progress, but which also led to delivery glitches and failed to stem the red ink: The USPS projects another $6.9 billion loss in fiscal year 2025.

DeJoy’s thanks for attempting to fix the postal service was relentless vilification from the postal lobbies, unions, and their allies among the media and politicians, who alleged he had a hidden agenda to privatize the USPS per instructions from Trump. In 2020, Democrats and sympathetic journalists hyperbolically accused DeJoy—a Republican donor whose appointment Trump engineered earlier that year—of plotting to sabotage on-time delivery of mail-in ballots.

Now that DeJoy is gone, the American Postal Workers Union’s president is labeling his ouster “part of the ongoing oligarchs’ coup against the vital public services our members and other public servants provide the country.” He warned that postal privatization will be next, with rate hikes and service cuts to follow. A coalition of business interests—including, yes, the envelope producers—is making similar noises.

But would privatization be so terrible?

Contrary to scare rhetoric from opponents, the United States’ peer nations, including Germany, Japan, Britain, Portugal, and the Netherlands, have adopted postal privatization. Among other benefits, privatization would enable the USPS to rationalize prices and unload much of its physical infrastructure, which includes thousands of underused and money-losing retail locations.

To be sure, the USPS is a special case. By far the largest postal agency in the world, it processes 44 percent of all global mail. Unlike any European nation or Japan, the United States contains vast stretches of lightly populated territory. It will always be costly to fulfill a “universal service” mandate to deliver everywhere.

Still, this is the age of drones, driverless vehicles, and artificial intelligence. Surely it should be possible to overcome the inevitable challenges, with enough fresh capital, fresh ideas, and—crucially—freedom to innovate.

The real problem with postal service privatization is not whether, or how, but who—as in, who would buy it?

For a personal essay on the postal service, read River Page’s piece, “The Post Office Isn’t a Business. That’s a Good Thing.”