USPS Service Cuts Could Impact Merchants

Despite improving financial results, the U.S. Postal Service may reduce some services, including Marketing Mail, which could affect retailers and B2B sellers.

“Our results for the year show a positive trajectory in virtually all of the areas where we have the ability to exercise control over our business,” said Postmaster General David Steiner during the agency’s November 10, 2026, Board of Governors meeting.

The trouble, according to Steiner, is that “many aspects of our business are uncontrollable because they are dictated by Congressional and regulatory requirements.”

“Given all of the restrictions placed on us…we will need to make drastic changes in the number of post offices and Marketing Mail service levels,” Steiner said.

Catalogs and mailers are still a potent way to influence shoppers.

Financial Pressure

The USPS also released its fiscal 2026 results. The agency suffered a $6.5 billion net loss in the year ended September 30, down from a $9 billion loss in fiscal 2025. Operating revenue increased 3% to $82.9 billion.

The USPS also deferred approximately $2.6 billion in retirement contributions during fiscal 2026 as the agency continues to ask for legislative changes to its pension and other obligations.

Steiner has repeatedly described two possible paths forward: (i) Congress removes or funds certain obligations, or (ii) the USPS reduces services.

It is a “policy choice between reduced levels of service or reform,” Steiner said.

Marketing Mail

Although it did not say exactly how service offerings might change, the USPS release called out Marketing Mail, a bulk service used for advertising, promotional postcards, catalogs, and similar mailings.

The Postal Service handled some 56.1 billion pieces of Marketing Mail in fiscal 2026, down a mere 1.1% year over year. Revenue for the service class, however, rose 5.3% to $16.7 billion, thanks primarily to price increases in October 2025 and July 2026.

Ultimately, the significance of Steiner’s warning about Marketing Mail depends on the details.

Marketing Mail already operates under lower delivery standards than First Class. Businesses generally accept longer delivery windows in exchange for relatively lower postage costs.

If USPS extends those windows, merchants might need to send catalogs and promotional materials earlier. That would increase the time between developing a marketing campaign and its arrival in a shopper’s mailbox.

Longer delivery standards, however, don’t necessarily mean lesser reliability. A mailing that consistently arrives within seven days could be easier to coordinate with an online promotion than one that arrives unpredictably within three to five days.

Steiner shared that USPS expects to propose service reductions during the first quarter of calendar year 2027 and present those plans to government leadership.

Retail Direct Mail

While it is not often a tactic for small to mid-sized ecommerce businesses, direct mail remains popular. Even Amazon offers a physical gift catalog for kids.

Amazon still sends a physical catalog on request.

Here’s the challenge. Imagine an apparel retailer prepares a catalog to promote a spring collection. The retailer’s marketing team might coordinate the catalog’s arrival in a shopper’s mailbox with new inventory, an email campaign, and a limited-time discount on its ecommerce site.

If Marketing Mail delivery takes longer, the merchant may need to move printing and mailing deadlines forward. Otherwise, catalogs could arrive after the promotion begins or when popular sizes and styles are no longer available.

That possibility means merchants that rely on printed matter may need to adjust 2027 planning cycles.

B2B Ecommerce

Changes to the USPS’s Marketing Mail service could also affect online wholesalers and distributors that use printed catalogs to introduce products and generate sales.

A 2025 study (PDF) by Distribution Strategy Group, a consultancy, found that 12% of responding distributors and manufacturers ranked printed catalogs as their most effective channel for generating ecommerce demand.

The impact of service reductions would depend on a merchant’s actual use. Not every printed catalog is delivered through USPS Marketing Mail. Some are distributed through sales representatives, trade shows, and other channels.

Post Offices

In addition to Marketing Mail warnings, Stiener said the agency could reduce the number of post offices it operates.

The potential closures could increase shipping costs for ecommerce merchants in rural communities.

A January 2026 study from the left-leaning Brookings Institution found that rural counties with relatively better access to post offices had higher levels of small-business activity. The relationship was strongest in retail, transportation, and other industries that depend on physical services.

For example, a small ecommerce merchant may drop off packages at a nearby post office four times per week. If a closure adds 45 minutes to each trip, the merchant would spend three additional hours weekly delivering packages, assuming the USPS does not offer a pick-up service.

That is an expense not reflected in postage rates.