Amidst the organization’s liquidity crisis, the United States Postal Service (USPS) had some promising Q3 2026 results, such as increased operating revenue, decreasing controllable loss, and a narrowing net loss.
Interestingly, the agency’s revenue wasn’t boosted by more people using its services, but by the pricing increases that USPS has implemented over the last year. With the agency still going through the crisis, more revenue is needed, and the company is willing to sacrifice overall volume to get it.
USPS Revenue Grows, But Not Thanks to Volume
USPS just announced its financial results for Q3 2026, and things may be looking up for the agency that has been struggling through a liquidity crisis for years. First, controllable loss sank to $1 billion, down from $1.6 billion in the same quarter last year. Similarly, net loss for the quarter went down to $2.5 billion, compared to $3.1 billion in Q3 2025.
On top of losses not being as steep this quarter, revenue also jumped considerably. It rose 6.1% compared to the same quarter last year, up to $19.9 billion in Q3 2026. Revenue increased for many service categories, including First-Class Mail, Marketing Mail, and Shipping and Packages.
However, while agency revenue grows, it’s not due to more volume. In fact, only the Marketing Mail and “Other” service categories saw increased volume in Q3 2026 compared to Q3 2025, while every other service category saw drops by millions of pieces. As a result, there’s something else other than a greater demand for the service that’s boosting revenues.
Higher Prices Are Driving USPS Revenue Growth
That “something else” is higher prices. Throughout 2026, USPS implemented numerous pricing changes that made many of its services more expensive. This includes a price increase at the start of 2026, which was then followed up by more time-limited price changes for some products only a few months later.
While high prices are increasing revenue, they may also contribute to volume going even lower. For example, as prices continue to rise and rise, many ecommerce sellers will take their shipments to private carriers. USPS has traditionally been an attractive carrier for small businesses, especially for lightweight shipments, but higher pricing may change this.
Shipping is already a major pressure point and challenge for many ecommerce sellers, and it only becomes worse when prices go higher. This creates a balancing act where USPS wants to increase prices enough to get through its long-term liquidity crisis, but not too high that it tanks volume to a point where even higher prices aren’t enough to get them out of trouble.
Pricing Continues to Play a Major Part in USPS’s Strategy
At the USPS Board of Governors meeting, David Steiner, the Postmaster General for USPS, stated that pricing would keep playing an important role in the agency’s financial plans. Specifically, he said that the recent Q3 results “show the strong leverage that pricing can have on results” and that pricing is a lever they have to use now to grow revenue.
He added that USPS using its pricing authority is “absolutely necessary to improve our financial sustainability and we need to be given more flexibility if we are expected to cover our costs.” Steiner also mentioned that while he would like to increase both volume and revenue, if they can only do one, they want to do it in a way that maximizes total revenue.
It also seems like the agency isn’t done with its strategy of using higher prices as a way to escape the current crisis. Steiner said that “All of the statistics and results show that we have yet to cross the point that we should be changing our pricing strategy, and that we have more price to take in the marketplace. It would be financially irresponsible of us not to do so.”
While these price changes clearly boost revenue, they put many ecommerce sellers in a difficult situation. They need to decide whether to eat the higher costs themselves, and thus hurt their bottom line, or pass them onto customers, which may hurt sales and/or customer loyalty.
USPS Wants to Change Its Unsustainable Model
Also, while the revenue boost is clearly helpful for the agency, it isn’t enough, according to Steiner. To that point, he said that “As things stand, the Postal Service is expected to be self-sustaining while, at the same time, fulfilling mandates that are inherently unsustainable and do not cover their costs.”
He strongly called for change by saying that “the bottom line is that we need to fix the business model that has produced the 17-year-long imbalance in costs and revenue – and that is going to require Congressional involvement.”
Our Take
Prepare for More Pricing Increases
Based on the words of the Postmaster, and the agency’s need for more revenue, it wouldn’t be surprising to see more pricing increases on the horizon. For ecommerce sellers and brands relying on USPS to deliver items, this is yet another cost increase to worry about and plan for.
To prevent these likely increased costs from sneaking up on you, make sure to prepare for them ahead of time. Companies can do this by diversifying their carriers and shopping for the best rates, quickly adjusting prices based on new shipping rates, switching to more lightweight packaging materials when possible, and using right-size boxes to eliminate empty space.
While there’s no word on how much these price jumps will be, or even if they’re happening at all, it seems fairly clear that USPS knows it needs to increase prices to have the best chance of escaping its current crisis.
