Dive Brief:
- The U.S. Postal Service is preparing for a 9.4% year-over-year revenue jump in its package delivery segment, according to projections submitted to the Postal Regulatory Commission on Wednesday.
- The expected increase in its shipping and packages segment, which includes delivery services like Ground Advantage and Parcel Select, would help drive a projected 2.9% increase in revenue overall for the agency in fiscal year 2026, per the integrated financial plan. FY2026 began Oct. 1.
- However, the Postal Service is also expecting a 42% decline in revenue for its international mail and packages segment, including a 56% drop for inbound services. While the filing didn't provide a reason for that projection, postal providers globally have reported U.S.-bound volume declines after the Trump administration eliminated the de minimis exemption.
Dive Insight:
The package delivery projections count on the Postal Service to grow that segment much more than it did in fiscal year 2025.
Last year, shipping and packages revenue increased 1% YoY on a volume decline of 5.7%. While Ground Advantage has been a growing bright spot in the category, volume drops in Priority Mail and parcel services drove down results.
After reporting FY2025 results earlier this month, Postmaster General David Steiner outlined his strategic ambitions to fuel further growth in the agency's package delivery segment. The Postal Service is aiming to encourage more shippers to utilize its first-mile and last-mile capabilities, suggesting a shift from the agency's previous emphasis on having more packages flow end-to-end in its network. Planned rate increases slated for January could also aid the Postal Service's efforts to boost revenue.
Meanwhile, the Postal Service is projecting a 1.1% drop in work hours in FY2026, "driven by initiatives to improve efficiency and by work hour management efforts in response to lower volumes," per the filing. Total mail and package volume is expected to decline 6.6% from the previous year.
Reducing labor expenses has been an ongoing priority for the Postal Service. In August, the agency reported nearly 10,500 employees accepted a voluntary early retirement offer.
