With Rob Glaza actively engaged in national postal policy and operations discussions as an MTAC member, American Litho remains closely connected to the developments shaping the future of the U.S. Postal Service.
The July MTAC meeting delivered one of the clearest messages we have heard from postal leadership this year: the Postal Service is preparing to use every available tool, including legislation, operational changes and additional price increases, to address its continuing financial losses.
For mail owners, this is more than a postal policy discussion. It has direct implications for 2027 budgets, campaign planning, postage strategy and expectations surrounding service performance.
USPS Is Preparing a Legislative Proposal
Postmaster General David Steiner told MTAC attendees that the Postal Service is finalizing a legislative proposal intended to address its ongoing financial challenges.
He pointed to three fundamental obligations that place persistent financial pressure on USPS:
- Delivering mail six days a week to every address
- Maintaining a nationwide network of post offices
- Operating within regulatory constraints governing price increases
Steiner indicated that his preferred outcome would be to strengthen the entire postal ecosystem in a way that benefits USPS, the mailing industry and the federal government. However, he also made it clear that, without meaningful legislative and administrative changes, the Postal Service will continue to focus on maximizing revenue.
He warned that if USPS cannot secure an acceptable legislative package, it could consider more severe cost-cutting measures, including reductions in service levels designed to decrease work hours.
My Take
The Postal Service is framing its challenges as structural, not temporary.
That means large-volume mailers should not build long-term plans around the assumption that postal pricing or service conditions will soon stabilize on their own. Legislative relief could improve the Postal Service’s financial position, but the final package, timing and protections for mailers remain uncertain.
If a legislative solution does not materialize, the alternatives could include more aggressive pricing, reduced service levels or a combination of both.
Mail owners should prepare for multiple scenarios rather than relying on a single forecast.
Two Potential Rate Scenarios for 2027
USPS also offered important forward guidance on what 2027 pricing could look like.
On July 16, the Postal Service asked the Postal Regulatory Commission for a partial waiver of its density rate authority rules. USPS wants to use a combination of actual and forecasted fiscal year 2026 data so it can transition to a January rate-change cycle in 2027.
Based on the guidance presented at MTAC, mailers could potentially face one of two scenarios:
- An increase of approximately 4.4% in January 2027, consisting of a projected 1.8% CPI adjustment and a 2.6% density-related increase
- An increase of approximately 6.2% in July 2027, consisting of a projected 3.4% CPI adjustment and a 2.8% density-related increase
These are potential scenarios, not final rates. However, they give mail owners an important planning range.
PostCom has filed comments opposing the requested waiver, arguing that the proposed calculation relies too heavily on estimates and could improperly increase the amount of rate authority available to USPS.
PostCom also raised a broader concern: as Market Dominant mail volume declines, the density adjustment can allow USPS to impose larger increases on the mail that remains.
Take Note
The timing of the next increase may still be unresolved, but the direction is not.
Mail owners preparing 2027 budgets should begin modeling the effect of both a January increase and a potentially larger July increase. Waiting for a final filing could leave organizations with less time to evaluate formats, circulation, production schedules and logistics.
For sophisticated direct-mail marketers, postal planning can no longer be separated from campaign planning. Postage assumptions should be tested early, alongside creative, format, paper and production decisions.
Financial Results Continue to Raise Concerns
A recent Postal Regulatory Commission analysis found that USPS failed to meet all four of its fiscal year 2025 performance goals covering:
- High-quality service
- Customer experience
- A safe and engaged workforce
- Financial health
USPS missed all of its on-time performance targets for Market Dominant mail for the second consecutive year. Its composite on-time score was 90.22%, compared with a target of 91.40%.
The financial results were also significantly below plan. USPS reported controllable losses of $2.70 billion for fiscal year 2025, compared with a target of $1.09 billion.
The PRC noted that the continuing difference between the Delivering for America plan’s projections and actual results raises questions about whether the plan’s financial trajectory is realistic.
This creates a difficult environment for mailers: continued pressure for higher rates without corresponding assurance that service performance will improve at the same pace.
What This Means for Mailers
Rate increases are only one part of the total cost equation.
Inconsistent delivery can affect promotional timing, offer windows, customer response and coordination with other marketing channels. Organizations should evaluate postal performance as part of campaign execution, not simply as a transportation issue after production is complete.
Greater visibility, disciplined mail preparation and carefully planned entry and logistics strategies will become even more important as the network continues to change.
USPS Is Investing in Greater Mail Visibility
One potentially positive development is the Postal Service’s continued investment in end-to-end visibility.
USPS leadership identified the “tail of the mail” pieces that fall outside normal delivery expectations—as a major service problem. The agency believes better end-to-end data can help identify and reduce those delays.
USPS is testing Bluetooth-enabled tracking technology to improve visibility into container movement, loading and unloading. One pilot reportedly captured activity that was missed by manual scanning.
The broader goal is to create more consistent, dynamic tracking and use visibility as a service differentiator.
This aligns with what we have heard at previous MTAC meetings: data, tracking and network visibility are becoming central to how USPS intends to manage performance.
The Opportunity for Mailers
Improved visibility could help mail owners better understand where delays occur and make more informed decisions about campaign timing and logistics.
Technology alone, however, will not eliminate every operational inconsistency. Mailers still need accurate data, proper preparation, a knowledgeable logistics strategy and a partner capable of identifying problems before they affect campaign performance.
USPS Outlines Its Peak Season Strategy
USPS also shared its preparations for the 2026 peak mailing and shipping season. The plan centers on four areas:
- Equipment: Expanding processing windows where needed, reducing manual package handling and increasing daily package and bundle processing capacity to 67 million pieces
- Space: Making greater use of space created by removing outdated equipment and gradually reducing reliance on temporary peak annexes
- Workforce: Hiring approximately 7,500 pre-career employees for peak season, 1,000 fewer than last year—while managing overtime more strategically
- Network modernization: Using regional processing and distribution centers, local processing centers and regional transportation hubs to improve capacity and reduce reliance on older transportation structures
These preparations are primarily focused on package volume, but changes to facilities, staffing and transportation can influence the broader postal network.
A Much Larger Financial Debate Is Taking Shape
The USPS Office of Inspector General also released a wide-ranging analysis of possible solutions to the Postal Service’s financial gap.
USPS costs have exceeded revenue every year since fiscal year 2006, producing combined losses of nearly $118 billion. The report examined 15 potential revenue-generating and cost-saving options across five strategic areas:
- Expanding USPS pricing authority
- Providing government funding for the Universal Service Obligation
- Restructuring workforce costs
- Reforming pension and retiree benefit obligations
- Reducing operational and delivery costs
Some of the options would have major consequences for mailers and the public. They include modifying or removing existing price caps, reducing delivery frequency, converting more door delivery to curbside or centralized delivery, outsourcing portions of the postal network and reconsidering certain preferred-rate discounts.
The report does not recommend a single solution. Instead, it demonstrates the scale of the financial problem and the difficult tradeoffs surrounding nearly every potential response.
What Mail Owners Should Be Doing Now
The latest MTAC meeting reinforces several actions for mail owners:
- Build realistic postal increases into 2027 budgets
- Model both the January and July pricing scenarios
- Evaluate format and weight before campaign specifications are finalized
- Review mailing schedules and in-home requirements earlier
- Use postal data and tracking to identify performance risks
- Coordinate production, commingling, freight and entry strategies
- Maintain flexibility as legislation and regulatory proceedings develop
The exact path forward remains uncertain, but the risks are becoming easier to identify.
Final Thought
The postal environment is entering another period of consequential decisions. USPS is looking to Congress, regulators, operational changes and its pricing authority to address financial losses.
Mailers, meanwhile, need pricing predictability, dependable service and enough advance notice to make sound business decisions.
At American Litho, our PostEvolution services help mail owners turn postal intelligence into practical action. We evaluate formats, preparation, logistics, postage and campaign timing together, helping customers model potential changes and make informed decisions before those changes affect budgets or performance.
If you have questions about how the developing 2027 postal scenarios may affect your direct-mail program, I welcome the opportunity to review them with you.
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