Expert Observation and Analysis | USPS’s $3.1 Billion Loss: The Chain Reaction Between the Philatelic Market and the Postal Ecosystem

Quick takeaways

a net loss of $3.1 billion this quarter. The core issue was not a “sudden cliff-like drop in revenue,” but rather structural burdens and non-cash actuarial adjustments that amplified quarterly fluctuations.

Although the revenue of the parcel business increased slightly (about 0.8%), the volume of parcels decreased by 6.5%, and some major customers began to take back the “last mile,” which suggests that long-term growth is not stable.

For the philatelic community, in the short term, it will be affected by “stamp pricing/sales strategies” and “post office physical service adjustments,” and the secondary market liquidity and premiums of some rare items will fluctuate accordingly; the long-term outcome will depend more on whether regulators (PRC) and Congress can handle pension and long-term obligation issues.

(Data and original sources include USPS official, FreightWaves, PRC announcements, etc. You may have seen these links.)

First, clarify the facts on the books (my intuition based on daily financial statements)

A closer look at the Q3 2025 financial report reveals a net loss of $3.1 billion. It sounds dire, but don’t just look at the headlines. A closer look at the income statement reveals that revenue hasn’t collapsed—total operating revenue was approximately $18.8 billion, flat with last year. The problem lies almost entirely on the expense side: operating expenses totaled approximately $22 billion, with three areas of concern:

Workers’ compensation and actuarial adjustments added approximately $237 million in the quarter (non-cash, but reflected in the income statement, highly volatile).

Increased compensation and benefits costs—approximately $360 million in incremental costs.

Other operating costs (including information technology, depreciation, etc.) increased by approximately US$205 million.

To sum it up: income is stable, but bills are growing too fast. In the short term, this is a liquidity issue, and in the long term, it’s a problem of institutional burden.

2. Parcel Business: Hidden Concerns Beneath the Surface of Prosperity

While new products like Ground Advantage have certainly brought revenue elasticity (with some quarters showing strong performance), package delivery volumes still fell 6.5% this quarter. In other words, while price increases can temporarily prop up numbers, volume is shrinking. More problematically, customers like Amazon and some large retail clients are considering or already taking back last-mile delivery, squeezing USPS’s long-term market share. A 0.8% revenue increase sounds good, but don’t let the numbers fool you—volume is the real lifeblood.

3. Direct impact on the philatelic/stamp market

As someone who reads USPS news every day, I’ll break down the impact into three paths to explain it briefly:

Issuance is becoming more commercialized: institutions are seeking funding, and products that can be immediately monetized, such as commemorative stamps, limited-edition sets, and cross-border collaborations, will become more frequent. The upside is a wider range of themes and limited editions; the downside is the potential dilution of cultural scarcity.

Postage and face value are linked: If postage (first class, first class) continues to increase, it will push up the cost of physical stamps and compress the purchasing power of ordinary collectors; if regulators (PRC) restrict price adjustments, the USPS’s room for self-rescue will be further compressed.

The secondary effect of the contraction of grassroots channels: If post office window services are reduced and delivery frequencies are adjusted, local commemorative stamps and small-batch exclusive sales will become harder to find, thereby pushing up the premium of locally scarce stamps.

Short-term opportunities and long-term risks coexist—for collectors, this means taking into account both the “value of the subject matter” and the “security of the acquisition channels” at the same time.

4. Politics and Regulation: Why This Is a Decisive Year

Two things to watch closely: the PRC’s stance on pricing authority and Congress’s willingness to take action on pension/long-term obligations.

If the PRC tightens its pricing freedom, the USPS will lose its leverage to relieve pressure by raising prices in the short term.

If Congress doesn’t address structural obligations (such as the payment mechanism for retirement benefits), the drama of being slapped in the face by “actuarial adjustments” every quarter will continue.

In addition, the new director David Steiner’s words and personnel appointments will also become the focus of the game between the market and the union in the coming months.

5. Practical Advice for Different Stakeholders (From an Expert)

A. Philatelists and small- and medium-sized dealers

0–6 months: Give priority to purchasing physical stamps with “cultural value + limited edition numbers + certificates”; don’t overfill your portfolio.

6–24 months: Diversify across multiple channels (online auctions, overseas buyers, insurance escrow), and include transportation and storage risks as cost accounting.

Tip: For high-priced items, be sure to prepare provenance, certificates, and a clear chain of origin.

B. Large dealers/auction houses

Use USPS’s quarterly disclosures as pricing nodes—interim reports and temporary price adjustments will bring short-term liquidity.

Establish backup logistics channels (preferential collaboration with FedEx/UPS) in case postal service fluctuations affect high-value transactions.

C. Policymakers and unions (if you’re listening)

Short term: Consider temporary fiscal buffers or bridge arrangements to avoid disruptions in grassroots services and escalation of labor-capital conflicts.

Medium to long term: Promote structural reforms at the congressional level, redesign the payment mechanism for pensions and long-term obligations, and clarify the pricing boundaries of regulation (PRC).

6. Six signals I watch every day

The amount of “non-cash actuarial adjustments” in the quarterly report (like $237 million this quarter) can instantly change the direction of the income statement.

The “volume vs. unit price” ratio of package products such as Ground Advantage (whether it is achieved through organic growth or price increases).

New trends in the PRC regarding pricing frequency and magnitude (which, if restricted, would significantly change USPS strategy).

USPS’s temporary price adjustment announcement (pay special attention during the holiday season and around holidays).

Personnel changes on the board of directors and the tone of the director’s public speeches (strategic signals are often hidden between the lines).

Union negotiations and adjustments to grassroots delivery points (especially the closure of rural windows and changes in delivery frequency).

Final judgment

The $3.1 billion figure isn’t just an isolated accounting figure—it exposes the long-term tension between the USPS’s public mission and its market viability. Short-term price increases and network streamlining can provide temporary relief on the balance sheet, but without institutional restructuring of long-term obligations (pensions, compensation), any profit improvement is likely to be wiped out by the next actuarial adjustment.

For the philatelic industry, this presents both short-term arbitrage and thematic release opportunities (more marketing-oriented releases), but also a prelude to long-term uncertainty (if physical outlets and grassroots service functions are weakened, the collecting ecosystem will undergo irreversible changes). My advice remains the same: be cautious in the short term, and focus on institutional reform in the long term. Collectors should shift their focus from “single-coin premium” to fundamental competencies such as “access channels, certification, and safekeeping.” Policymakers should shift their focus from quarterly profits and losses to the higher level of institutional redesign.

Primary Source

USPS official quarterly report and announcement (FY2025 Q3)—about.usps.com
Industry analysis (FreightWaves, etc.) and policy information—freightwaves.com/prc.gov
Media coverage (AP News, Politico, etc.) Follow-up on the Commissioner and the union—apnews.com/politico.com