America’s postmaster general knew that sooner or later, DOGE would come calling at the US Postal Service.
So Louis DeJoy decided to have DOGE work with him.
The nation’s top mailman this week signed an agreement with Elon Musk’s Department of Government Efficiency to collaborate on reforms to the sprawling service, which delivers letters and packages from tropical Guam to the Alaskan wilderness. Rather than wait for the DOGE crew to dictate changes, DeJoy is seeking to shape them.
“This was a short and healthy conversation” that stated a few days ago, DeJoy said in an interview. “We’re off to the races.”
Read More: Postal Service Head Signs DOGE Agreement to Spur Reforms
He also wants to cement in place a series of reforms he’s been pursuing for the last four years. Unnoticed by most Americans, the venerable Post Office has been trying to reinvent itself, cutting expenses while shifting to a modern hub-and-spoke distribution system similar to competitors United Parcel Service Inc. and FedEx Corp.
For customers at least, DeJoy’s “Delivering for America” reform plan has produced limited results, with many Americans now waiting longer to get their mail. But in a letter to Congressional leaders Thursday disclosing the DOGE deal, DeJoy touted the costs — and staff — already cut and said the service is headed for better days.
“The Postal Service once faced the immediate threat of insolvency, which would have required a taxpayer bailout,” he wrote. “Now, the Postal Service is instead finally experiencing an unprecedented period of growth and innovation.”
DeJoy already announced he intends to step down from his office, even though the 10-year Delivering for America plan isn’t yet halfway through. President Donald Trump has mused about taking the service private or folding it into the Department of Commerce, while Musk also called for privatization. In contrast, DeJoy’s letter called for ensuring that some version of his own reforms continues after his departure.
At least two DOGE and GSA employees will work under DeJoy’s supervision, searching for potential savings and efficiencies, according to a person familiar with the details of the plan. “It’s not an army,” DeJoy said. “I still run the organization.”
Reforming the nearly 250-year-old Postal Service, which employs 635,000 people, is a complex task — in part because of its mandate. Unlike its private competitors, the USPS is required to reach Americans even in the most remote places, no matter how sparsely populated. Indeed, UPS and FedEx alike pay the service to cover “last-mile” deliveries in many rural areas where they would otherwise struggle to operate profitably. And while it’s an independent government agency, not directly under White House control, it faces regulations and legal requirements its private competitors don’t.
“The level of transformation needed at the US Post Office to basically be a profitable network in 2025, versus what DeJoy’s actually been able to move the dial on, there’s a huge disconnect between those two,” said Derek Lossing, founder of Cirrus Global Advisors, a logistics consulting firm.
Big Losses
In his letter, DeJoy, a former private-sector logistics executive and Trump donor who took office in 2020, said he inherited an organization that had experienced close to $100 billion in losses and was on track to lose another $200 billion.
“When I got there, I didn’t take into account how broken we were,” DeJoy told Bloomberg in December.
He never envisioned staying at the agency for this long. “I originally came here for three years, fell in love with the people,” DeJoy said on Thursday. “It’s very, very important work.”
Some of the changes he implemented were relatively straightforward, such as making sure trucks were full before going out on a route rather than sending out a driver with a half-empty trailer. Others were bigger, including consolidating facilities and shifting volume away from expensive air transport to ground trucks. The service also is establishing a series of 60 regional distribution centers.
He increased revenue by focusing more on packages and raising rates, with the cost of a stamp rising 33% between January 2019 and July 2024. The service is largely self-funded through its revenue from operations.
DeJoy has also trimmed the service’s immense payroll, cutting its labor workforce by 30,000 people from fiscal 2021, with another 10,000 expected to depart in a voluntary early retirement program. And yet, for all the changes, the service posted a $9.5 billion loss last year, while on-time delivery of first-class mail declined.
DeJoy sees slower deliveries as temporary growing pains. He’s pushing employees “to step up and act like FedEx and UPS.” Those are “formidable organizations, and we had a lot of transition, a lot of heavy baggage,” he said. Come summer, “we’re gonna be rocking.”
In his letter, DeJoy asked Congress to fix some issues the service itself cannot. In particular, he said unfunded federal legislative mandates saddle the agency with $6 billion to $11 billion in annual costs. And he took particular aim at the Postal Regulatory Commission, which oversees the service’s rates and performance. He called it an “unnecessary agency” too attached to “defective pricing models and decades old bureaucratic processes.”
‘Failed Miserably’
The commission promptly fired back, issuing a statement Thursday that DeJoy’s Delivering for America program had made the service less efficient and degraded its performance, particularly in rural areas. Commissioners also slammed his focus on the highly competitive package market, calling it “a strategy which has failed miserably to this point.”
In February, DeJoy asked the Postal Service Board of Governors to begin looking for his replacement, a process he hopes will take months rather than years. Even some critics of his plan praise him with taking on a difficult task.
“His successor has a mess, in short,” said Paul Steidler, a senior fellow at the Lexington Institute, a center-right think tank in Virginia. “His plan hasn’t worked, but give the guy some credit. At least he took a shot.”
DeJoy himself feels more confident stepping away now. “They know what they need to do, and that’s why I feel comfortable in giving the leave,” he said. “And if I get this help that I just laid out with these issues, the Postal Service will be in great shape for a long time.”
This story was originally featured on Fortune.com
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