The U.S. Postal Service could be at a critical tipping point in its history.
Last month, at the swearing-in ceremony for Howard Lutnick, the new secretary of commerce, President Trump said he's thinking of moving the Postal Service under the umbrella of the Commerce Department.
"We want to have a post office that works well and doesn't lose massive amounts of money," Trump said. "We're thinking about doing that, and it'll be a form of a merger, but it'll remain the Postal Service, and I think it'll operate a lot better than it has been over the years. It's been just a tremendous loser for this country."
The Postal Reorganization Act of 1970 remodeled the Postal Service from a cabinet department to an independent agency under the executive branch. As a result, the president can nominate members to the board of governors, but has no direct jurisdiction over Postal Service operations.
And one of Trump's big ideas from his first term — privatization of the Postal Service — is still under consideration.
If these proposals go through, they would be some of the biggest upheavals the Postal Service has faced since it became an independent agency over 50 years ago.
In 2018, Trump commissioned a task force put together by the Treasury Department to recommend reforms to USPS. It concluded that rural communities would suffer from privatization.
In December, Trump did not explicitly say if he is still for privatization, but that "it's an idea that a lot of people have liked for a long time. We're looking at it."
Kevin Kosar, a senior fellow at the conservative American Enterprise Institute who researches the USPS, said an executive order would likely not be enough to merge the agencies or privatize the service.
Executive orders cannot override existing laws, so an attempt to place the Postal Service under another agency would likely be challenged in federal court, Kosar said. However, there is the option to maintain it as an independent agency overseen by the executive branch, but privatize operations such as mail hauling and sorting, he said.
What would privatization mean for consumers?
Privatizing the Postal Service could limit some Americans' access to its services. Private companies are not beholden to the universal service obligation that the Postal Service has, which sets a minimum level of service for all Americans. So a privatized Postal Service would likely focus on delivering to areas that turn the biggest profits — cities, said Brian Renfroe, the president of the National Association of Letter Carriers union.
A postal worker can deliver to more addresses in less time in urban areas, as opposed to having to travel a half a mile or so between homes, which is typical in rural areas, Renfroe said. Higher productivity can lead to more efficiency and lower operational costs, which helps maximize profits.
"A private business … will do things and take on work and customers where it is profitable for them, but typically where it's not profitable, they will not do that work, which is what they should do in private business," Renfroe said.
Renfroe said the National Association of Letter Carriers is prepared to push back against some of Trump's proposals.
NALC members protested in Washington, D.C. in late February against Trump trying to "dismantle the Postal Service," Renfroe said in a video captured by the Associated Press. He said the workers have rallies mainly to raise public awareness, but the organization will take legal action if needed.
"I think it's very clear this administration has no interest in protecting public service, working people or really the public good," he said. "They want to throw us away to create an unreliable, inefficient, expensive private delivery service. And what do we say to that?"
"Hell no," the crowd answered back.
Louis DeJoy, who spearheaded a plan to transform the Postal Service, plans to leave
Louis DeJoy, the postmaster general, announced to the Postal Service's board last month that they should start looking for his replacement, about halfway into his 10-year "Delivering for America" plan to overhaul the agency and make it more profitable.
In DeJoy's letter to the board telling them to look for his replacement, dated Feb. 17, he wrote that the Postal Service's business model "has been broken for over two decades."
"Postmaster General is a demanding role made more difficult by the devastating condition I found the Postal Service in when I arrived and the almost unceasing resistance to change — without offering any viable solutions — from stakeholders motivated by both parochial and political purposes," he said.
DeJoy was appointed as postmaster general in 2020 by President Trump, and in 2021, he unveiled his "Delivering for America" plan. It detailed some of the challenges DeJoy believed the Postal Service faced, such as more demand for packages than paper mail and a workforce reduced by the pandemic and high turnover among "non-career" employees.
To fix this, the plan proposed that the Postal Service would invest $40 billion toward processing more mail and upgrading trucks, retail stores and IT systems, among other things.
The Postal Regulatory Commission, an independent agency that helps monitor the Postal Service, has criticized DeJoy's plan. It said in a report published in January that the plan's financial goals are "overly optimistic and unsubstantiated," that it is not ready to be put into place and that rural communities would receive a lower standard of service.
In response, the Postal Service said the commission "presents a completely one-sided narrative that unjustifiably ignores or dismisses as unlikely to occur all of the positive benefits of the proposal."
Still, it agreed to implement some of the commission's recommendations, such as ensuring any service changes would be communicated clearly to the public.
It is unclear if the Postal Service will proceed with the Delivering for America plan under new leadership, but DeJoy said in his letter he would help make the transition as smooth as possible.
Kevin Kosar, the senior fellow at AEI, said DeJoy's plan has had some road bumps. For example, delivery speeds slowed in places where network changes were implemented, such as Richmond, Va., and Atlanta. But ultimately, he commends DeJoy for revamping a system that has not had significant upgrades since 1970, and has struggled to keep up with the ascension of email and e-commerce.
Under DeJoy's tenure, the Postal Service made a $144 million profit in the first quarter of fiscal year 2025, compared to a loss of $2.1 billion during the same period last year.
At the same time, the Postal Service had $8.1 billion in cash as of December 2024, and predicts it will lose $6.9 billion in 2025. And the agency can no longer borrow money from the Treasury Department, as it has hit its $15 billion limit.
"The new guy is going to be under intense pressure due to the fact that the Postal Service may run out of money within two years, and when it runs out of money, either it shuts down or the taxpayers have to bail it out," Kosar said.
Renfroe, the union president, said DeJoy had been "fairly dynamic" in maintaining round-the-clock service while trying to modernize such a large organization.
"To be just very honest about it, in the decade or so before he became postmaster general, that need for modernization had been neglected," he said.
The Postal Service did not respond to requests for comment.
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