This graph depicts the revenue and cost trends of the USPS since 2004. Between 2004-2006, USPS enjoyed a narrowing, but positive, gap between greater (and rising) revenues than costs. However, starting in 2007, revenue began to decline and the Postal Service was unable to decrease costs at the same or faster pace resulting in a widening negative gap through 2012 – the largest gap ever at more than $15 billion lost.

COST TRENDS
Universal Service Requirements and Legacy Infrastructure
Constantly increasing delivery points, often in less-densely populated areas
High fixed costs of excess operating capacity, aging facilities and equipment, and service standards that do not meet market requirements
Resource Requirements
Vulnerable to increasing healthcare and fuel costs
Despite significant investments in automation, improvements in productivity and staffing reductions, labor costs remain high

REVENUE TRENDS
Pricing
Unlike many other posts, the USPS is limited in its ability to increase prices
Statutory requirements for preferred rates for some categories of mailers reduces profitability
Continuing Volume Declines in Key Mail Categories
No short-term expectation of improved economic growth
Continuing diversion, especially in profitable First-Class Mail and greater indirect competition from other forms of advertising
Restrictions on generating new revenue from product and service diversification