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USPS Suspends Nonessential Expenses Amid Cash Shortage
Postmaster General Steiner Cites Temporary Cash-Flow Shortage; Limits Travel, Supplies, Services
Key Takeaways:
- The U.S. Postal Service is suspending discretionary spending after Postmaster General David Steiner detailed cash-flow shortages in a May 26 memo to employees.
- The restrictions hit nonessential travel, office supplies and some professional services as the agency tries to stave off running out of cash by early 2027.
- Steiner said the curbs last until cash stabilizes as USPS raises prices, halts pension payments and begins a DHL last-mile deal worth $10 billion.
The United States Postal Service is suspending discretionary spending across the organization as it faces a looming liquidity crisis.
The spending restrictions cover nonessential expenses including travel, office supplies and professional services that do not support essential work, Postmaster General David Steiner said in a May 26 memo to employees that was seen by Bloomberg News.
“As you are aware, we are currently experiencing a temporary cash-flow shortage that requires us to take decisive steps to manage our available resources responsibly,” Steiner said in the memo. “These actions, while challenging, are necessary to ensure we continue operating effectively.”
The new cutbacks will remain in place until the agency’s “cash position stabilizes,” Steiner said in the memo, which was reported earlier by Reuters.
The postal service is working to repair its tattered finances after years of staggering losses brought on by high operational costs and declining mail volumes. Steiner has said that the agency is set to run out of cash by early 2027.
The agency has taken other steps in recent months to avoid that fate, including raising prices on stamps and parcel shipping and halting pension payments. Earlier this year it retained the services of restructuring adviser Alvarez & Marsal to develop a plan to confront the crisis, Bloomberg previously reported.
Separately on May 28, the USPS announced that it would exclusively handle last-mile e-commerce deliveries for global courier DHL under a new multiyear agreement. USPS expects the deal to bring in at least $10 billion in revenue over time.
USPS ranks No. 4 on the Transport Topics Top 50 list of the largest global freight companies.
