USPS On The Path Towards Financial Catastrophy

The United States Postal Service has experienced a boom in package deliveries during the pandemic but that is unlikely to save it from financial catastrophy. The organization has been in financial trouble for years and even though the higher demand for packages has reduced some of its financial losses, it has not eliminated them. The USPS remains at increasing risk of insolvency as a result of drops in mail revenue and increased costs due to Covid-19. It recently responded to a Congressional request about its financial projections, stating that a liquidity crisis could strike it as early as March 2021.

The grim projections were outlined recently on Inequality.org and they are based on two scenarios. Even if the package volume remains 15 percent above pre-Covid levels, the USPS would lose $7 billion in 2020-2021, a figure that rises to $17 billion if the package volume returns to normal. Over the next decade, losses would amount to $17 billion if demand stays as high as it is amid the pandemic while it would soar to $50 billion if the situation returns to the way if was beforehand.