In December, former President Donald Trump suggested moving the U.S. Postal Service (USPS) under the Department of Commerce as part of a broader restructuring effort. Recently, Louis DeJoy, the Trump-appointed postmaster general, signaled interest in collaborating with DOGE to explore privatization efforts.
Major financial institutions have taken note of the potential changes. Wells Fargo recently released a memo outlining possible political pathways to privatizing USPS, highlighting profit opportunities through asset sales and price adjustments. Their plan focuses on divesting the most profitable parts of USPS, raising prices, and reevaluating workforce structure.
According to the Wells Fargo memo, one possible model would involve keeping mail delivery as a taxpayer-funded service while privatizing package and parcel operations, which are more profitable. To maintain profitability, the memo suggests that USPS may need to increase prices by 30–140% across various services.
A key consideration is the Universal Service Obligation, which requires mail delivery to every U.S. address six days a week. The memo suggests that this obligation could be difficult for a private entity to sustain profitably, potentially leading to reduced service levels or changes to delivery schedules.
The memo also examines potential changes to USPS employment policies. Citing recent federal cost-control measures, it proposes offering "deferred buyout" options for employees, with layoffs as a possible alternative. Drawing parallels to the UK’s Royal Mail privatization in 2013, the document suggests transferring pension liabilities to the government rather than continuing them under a privatized postal service.
The memo acknowledges the impact privatization could have on workers, including:
Beyond mail and package services, USPS real estate assets are a key area of interest. Wells Fargo estimates USPS property holdings could be valued at up to $88 billion, including smaller post offices in rural areas. The memo suggests these assets could be sold or leased as part of a privatization strategy.
Despite these proposals, the memo recognizes that public and bipartisan support for USPS remains strong due to its critical role in American communities. It highlights that rural communities, in particular, have a strong connection to the postal service, which provides essential functions such as:
Given the political challenges of outright privatization, the memo explores alternative approaches, including pursuing changes through a budget reconciliation bill. It also raises the possibility of a restructuring of the USPS Board of Governors, which could lead to policy shifts, such as rate increases, that align with privatization goals.
The memo identifies postal unions as a key force opposing privatization efforts. It references the 1970 Great Postal Strike, noting concerns about potential labor actions that could disrupt mail and package delivery.
Recent union activity suggests growing worker opposition to major USPS policy changes. For instance, a new caucus within the National Association of Letter Carriers (NALC) led efforts to reject a recent tentative agreement and has called for a national day of action on March 23.
The conversation around USPS privatization remains ongoing, with supporters citing potential efficiency gains and critics emphasizing the importance of preserving USPS as a public service. Some advocates argue that expanding USPS services—such as offering postal banking, copying services, and seasonal retail options—could provide financial stability without privatization.
The Wells Fargo memo underscores the significance of the debate, recognizing both the economic opportunities and political challenges associated with privatization. The future of USPS will likely depend on ongoing discussions among policymakers, labor organizations, and the American public.
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