USPS slowed the mail to quit flying it. Half of it is flying again

In October 2021 the U.S. Postal Service made First-Class Mail slower on purpose.▸ The rationale, published in a binding federal rule⧉, was that air transportation is "less reliable than surface transportation" and "tends to cost significantly more" — so adding a day or two to delivery windows would let letters ride trucks. Five years later, an audit by the USPS Office of Inspector General⧉ — the agency's independent internal auditor — finds the share of that slowed mail traveling by air rose from 2 percent at the start of fiscal 2025 to about 50 percent by mid-fiscal 2026. The reason is not service. It is a $10 billion air cargo contract, signed September 30, 2024, whose guaranteed minimum volumes were set against a package forecast that assumed growth while Priority Mail was in fact collapsing. Packages met the contract's minimum in one of thirteen four-week operating periods in 2025; the Postal Service filled its paid-for planes with the very letters it had slowed the mail to keep on the ground. The auditor's words: this "contradicts previous decisions to extend delivery standards to allow for surface transport."

The promise is written down twice.▸ Delivering for America⧉, the ten-year strategic plan issued March 2021 to reverse a projected $160 billion in losses, committed to "shift volume from an unreliable and costly air network to a better managed surface network," and calculated that the slower standards would let 43 percent of air-carried First-Class Mail move to trucks. The plan told readers what success would look like: service that "meets or exceeds 95 percent on-time reliability."

The second writing is legally operative.▸ The final rule of August 11, 2021⧉ (86 FR 43941, effective October 1, 2021) — the Federal Register being where a policy becomes a rule — slowed the standard for a minority of First-Class Mail (61 percent kept its window; 70 percent stayed at three days or less) on one stated logic: planes are late more often than trucks, and they cost more. In sworn testimony to the regulator that year, a Postal Service witness estimated the change would cut First-Class Mail pounds flown by 49.3 percent⧉.

Before the rule took effect, the Postal Regulatory Commission — the Postal Service's regulator, whose advisory opinion the law requires USPS to seek but does not make binding — examined the arithmetic.▸ In its July 20, 2021 opinion⧉ (Docket N2021-1), the Commission recorded USPS's own projection: $279.6 million in gross annual transportation savings, less $110.1 million in lost revenue, for a net gain of $169.5 million a year. It then put that number in scale — 3.4 percent of transportation costs, less than a quarter of one percent of the agency's $82 billion in operating expenses — and warned that the estimate rested on an outlier base year and omitted mail-processing costs. Its central caution reads: the savings, "even if fully realized," do "not indicate much improvement, if any" and "would be eliminated by additional costs associated with the growth in packages."

The Commission was wrong in one particular: it was volume decline, not growth, that undid the plan.▸ But the structure of its warning — that the slowdown's small promised savings were hostage to whatever the package business did next — is the structure of what happened.

On April 1, 2024, USPS announced⧉ it had awarded UPS the contract to become its primary air cargo carrier, as its decade-old air cargo contracts approached expiration.▸ The agreement it signed that September, per the OIG audit⧉, is valued at more than $10 billion, runs through March 2030, and prices per cubic foot against average daily volume — with a guaranteed minimum the Postal Service pays for whether or not the mail shows up, and premium rates when volume falls outside the optimal band.

The minimums were set on a forecast that OIG found assumed a 2 percent overall increase in average daily volume, with no decline factor specific to Priority Mail — the expedited product that supplies much of the air network's load.▸ Priority Mail volume had already fallen about 54 percent in the three years before the award announcement, and fell roughly 31 percent more in the two years after it. The result: between December 30, 2024 and December 28, 2025, actual package volume met the contract's minimum in one operating period out of thirteen.

A contract that charges you for empty cubic feet converts empty space into a bill.▸ OIG calculated that flying packages alone would have cost over $127 million more and left 31.7 million paid-for cubic feet unused. So the Postal Service filled the planes with what it had: the share of 3-to-5-day First-Class Mail traveling by air went from 2 percent in the first quarter of fiscal 2025 to about 50 percent by the second quarter of fiscal 2026 — a 25-fold shift in six quarters. In March 2025 it began flying Marketing Mail, a product that had historically never been assigned to the air network at all; that volume grew 195 percent by November, though it remains about 2 percent of air volume.

Management told the auditors plainly that it expects to keep flying First-Class and Marketing Mail⧉ to meet the contracted minimums.▸ Given the contract, each individual decision is defensible — flying the letters was the cheaper option every time. That is the finding: the 2024 contract made the 2021 policy the expensive choice.

What did the slowdown buy?▸ Total transportation expenses did fall — from about $10.1 billion in FY2023 to about $8.4 billion in FY2025⧉, roughly $1.7 billion of annual savings, against Delivering for America's estimates of about $1.1 billion from surface initiatives and $701 million from air. But FY2025 spending still ran about $200 million over the Postal Service's own plan⧉, which the Annual Report attributes partly to shifting mail back to air in the second half of the year. For scale — and it is a comparison of scale across different years and measurement bases, not an accounting — that one-year overage is larger than the $169.5 million net annual gain the entire 2021 slowdown was projected to produce. And even with letters aboard, USPS missed the contract's optimal-pricing volume in at least three 2025 operating periods, leaving $54.1 million in potential savings⧉ unclaimed.

Service tells the same story from the reader's side.▸ The slowed 3-to-5-day tier — single-piece First-Class Mail, which OIG notes is mostly households and small businesses paying bills and sending correspondence — was delivered on time 72.76 percent of the time in FY2025⧉, against a target of 80, a plan goal of 95, and an FY2022 actual of 83.62 — a 10.86-point decline measured against the already slower standard. Meanwhile OIG found composite First-Class service performance rose from 82 to 87 percent as more mail flew: the mode the 2021 rule called unreliable is now propping up the reliability numbers of the mail that rule slowed.

- March 23, 2021 — Delivering for America commits to shifting mail off the "unreliable and costly air network"; 95 percent on-time goal. - July 20, 2021 — The PRC warns the projected $169.5M net annual savings is small, possibly inflated, and could be "eliminated" by package-volume changes. - October 1, 2021 — The slower First-Class standards take effect (86 FR 43941). - April 2021 – March 2024 — Priority Mail volume falls ~54 percent. - April 1, 2024 — UPS announced as primary air cargo carrier. - September 30, 2024 — $10B contract signed, minimums based on a +2 percent volume forecast; runs to March 2030. - Dec 30, 2024 – Dec 28, 2025 — Packages meet the minimum in 1 of 13 operating periods; First-Class Mail's air share climbs from 2 percent toward 50; Marketing Mail starts flying in March 2025. - February 2026 — OIG observes operations at the Denver, Milwaukee, Phoenix, and Miami air stops and 12 processing facilities. - July 1, 2026 — OIG issues Report 26-033-R26; management rejects the recommendation to re-examine the contract.

The disagreement is now formal.▸ OIG recommended two things: a plan to improve air-network volume forecasting (management agreed; the Vice President of Logistics owns it, with a target date of February 28, 2027), and an updated cost-benefit analysis of whether terminating the current contract for a shorter-term agreement would serve better. Management disagreed with the second⧉, disputing that flying First-Class Mail contributed $200 million in additional costs and asserting the contract already contains flexibility to adjust. OIG "views the disagreement on recommendation 2 as unresolved" and is pursuing it through audit resolution — the formal process by which an inspector general escalates a rejected recommendation. Until that resolves, the operative facts are unchanged: the contract runs to March 2030, the minimums stand, and management expects to keep flying the mail it slowed.