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Both President Donald Trump and Elon Musk have expressed interest in privatizing the US Postal Service, an idea that has long been popular in conservative circles. Such a move, however, could have major downsides.
Experts told Business Insider that privatizing the USPS, an independent agency older than the United States itself, could drive up prices for everyone β and especially harm businesses and nonprofits that depend on the mail, and rural communities that don't have other shipping options.
"Nobody at FedEx or UPS is looking after the public interest," James O'Rourke, who teaches management and organization at the University of Notre Dame and studies the USPS, told Business Insider. "They're looking after the shareholders."
In December, Trump said he was "looking into" privatizing the agency. And in late February, he suggested placing the USPS under control of the Commerce Department.
The USPS has rarely been profitable. It did recently report its first profitable quarter since 2022, but its total loss for the fiscal year ending in September was $9.5 billion, a $3 billion increase from its loss the previous year.
The agency's financial woes led then-Postmaster General Louis DeJoy β who stepped down from his role last week β in mid-March to commit to working with DOGE to make the agency more efficient, including cutting 10,000 jobs and eliminating billions of dollars from the budget.
If the USPS were privatized, it's not clear if existing laws regulating the agency, like mandating six days of service and universal delivery, would remain in effect.
If a private company were to take over USPS operations and those laws were thrown out the window, it would likely drive up prices, reduce delivery speed and frequency, eliminate service to all addresses, and close some of the over 30,000 USPS offices around the country, said Michael Plunkett, the CEO of the Association for Postal Commerce, which represents mailing and shipping industry companies.
Some communities would "almost certainly" feel more pain than others, Plunkett said.
"There are rural communities that would probably suffer if the postal service were changed in any significant way, especially in the short run," Plunkett said. And that's because "there's no other operator in many small and remote towns in the United States. That's why the postal service does last-mile delivery for other companies in those places."
O'Rourke said that even though the agency isn't as popular as it once was, it should still be treated as an essential public service.
"What concerns me the most is that we become two nations: the haves and have nots," he told BI. "And the gap between the two widens and the services available are no longer available to those who need them just as much as the others."
The nonprofit world still relies heavily on the mail for its fundraising efforts, said Robert Tigner, regulatory counsel at The Nonprofit Alliance, an association that represents and advocates for nonprofits.
If the USPS were privatized and discounted nonprofit mailing rates taken away, there would be a devastating impact on organizations, Tigner said.
"Nobody β even a big organization doesn't have an extra six or seven million lying around in order to continue what it's doing today," Tigner said. "It would cripple the current environment of raising money through the mail."
Its not just nonprofits who would take a hit from higher prices. Any business that relies on the mail for advertising would suffer too, Plunkett said.
"Any major change in how the postal service operates would be sufficiently disruptive that it would cause some companies and nonprofits to go out of business," Plunkett told BI.
The US would not be the first to privatize or reduce its mail service β the UK, Germany, and the Netherlands have privatized their post offices, and Denmark's state-run postal service recently announced it will stop delivering letters.
Chris Edwards, an economist at the Cato Institute, said the US should follow the example set by European countries.
"We don't need another government agency that's adding to our government debt," Edwards said.
He said any compromise from Congress that would pay a private company to cover the costs of offering universal service to every address in the US would still be cheaper than the government fully running the USPS.
Edwards called a possible merger with the Commerce Department "a very stupid idea." Congress, he said, already "micromanages" the agency, and if you add the commerce secretary and the president to that equation, it would make it even more bureaucratic than it already is.
Plunkett and O'Rourke agree with Edwards on one thing: Putting the USPS in the Commerce Department would give Trump much greater authority over the direct operations of the agency.
Any effort from Trump to fire the USPS's Board of Governors and take control of the agency would be illegal, the American Postal Workers Union president Mark Dimondstein argued in a statement last week. But, as we've seen with USAID, that doesn't mean the president can't still do it.
The National Association of Letter Carriers, the American Postal Workers' Union, and the National Rural Letter Carriers Association have been holding demonstrations around the country over the last week to protest cuts to and a potential dismantling of the USPS.
The White House did not respond to a request for comment about Trump's current plans for the agency.
NurPhoto
A few days ago, I noticed I needed a new mousepad. The cloth covering was starting to peel away from the rubber. So I went to Temu β more on that in a minute.
Mousepads are some of those things thatΒ β in theory β you should never buy; they just come into your life like cheap umbrellas or Mason jars.
But due to decades of repetitive motion from typing, my weary wrists need the kind of mousepad with the ergonomic padded blob at the end, not the plain, flat ones you accumulate for free.
So, spend my own money I must.
Now, I personally have conflicted feelings about shopping on Temu, but a mousepad is kind of a perfect Temu item: quality doesn't really matter, and a $3 one is the same as a $10 one β at least to the human eye. As a price-sensitive shopper, I went for it.
I found a plain, gray mousepad with a wrist rest on Temu for $2.74 and ordered it.
Temu / screenshot
Well, it wasn't quite that simple β Temu requires a $15 minimum for an order to ship, so I threw in a few other items β a squishy elbow rest pad, a new phone case, some hair scrunchies.
Then, disaster struck. Shortly after my order was placed, President Trump declared an end to the "de minimis" exemption. There's still some discussion as to exactly what his executive order will mean, but de minimis is the law that allows orders under $800 to ship directly from China to US customers without encountering duty and tax. It's a big part of how Temu and Shein have operated in the US so successfully.
Then, things went apocalyptic for my mousepad: Tuesday evening, the USPS stopped taking inbound parcels from China to the US. By Wednesday morning, the USPS had reversed that decision, resuming service.
What all of this means for Temu and similar sellers like Shein isn't exactly clear, but let's just assume it's not good. (Temu didn't respond to a request for comment.)
Still, both e-commerce platforms have advanced beyond only shipping direct from mainland China, and now many of their sellers have warehouses in the US to ship orders domestically.
On the homepage of Temu, the top promoted section is for "local warehouse stores" β sellers from warehouses in the US.
Temu / Business Insider
Shein's website has a less prominent tab for "QuickShip" items that ship from the US, which isn't visible at all on its mobile app.
While relations with one of our largest trade partners are up in the air, I have great news about my mousepad (which I'm sure you were worried about).
My Temu order appears to be still moving along in processing to be shipped.
Getty Images
The US Postal Service has reversed its position on parcels from China and Hong Kong, saying it will continue accepting them.
It had announced Tuesday evening it was temporarily suspending handling these parcels, in a move that stood to hurt Chinese e-commerce retailers.
USPS said on Wednesday it would "continue accepting all international inbound mail and packages from China and Hong Kong Posts."
"The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery," it added.
The reversal came around 12 hours after the announcement it would stop handling the parcels.
When it announced the suspension, which did not apply to letters or flat mail, it did not give a specific reason.
It came after President Donald Trump imposed a new 10% tariff on all goods imported from China from midnight ET Tuesday.
He also ended the de minimis exemption which allowed packages worth less than $800, bound for individual consumers, to avoid tariffs.
One economist said Tuesday that China and Hong Kong accounted for 67% of packages entering the US under the de minimis exemption between 2018 and 2021.
Chinese e-commerce retailers like Shein and Temu stood to lose from the USPS decision to suspend handling parcels from China.
Temu's parent company, PDD Holdings, was down in premarket trading on the Nasdaq Wednesday morning before the USPS announced it would resume handling parcels. The stock began to recover after the reversal.
One logistics expert previously told BI that the USPS not handling parcels from China would mean disruption and cancellations during a "chaotic" couple of days.
Alexi Rosenfeld/Getty Images
The US Postal Service said it is temporarily suspending inbound parcels from China and Hong Kong, in a potential blow to Chinese e-commerce retailers.
In a statement on its website Tuesday evening, the USPS said the suspension would take effect immediately and be in place "until further notice." It does not apply to letters and flat mail.
The suspension comes after President Donald Trump imposed a new 10% tariff on all goods imported from China and ended the de minimis exemption that allowed packages worth less than $800, bound for individual consumers, to avoid tariffs.
Louise Loo, the lead economist for Greater China at Oxford Economics, wrote in a note on Tuesday that the exemption had been "particularly relevant" for Chinese e-commerce retailers β such as Shein and Temu β and that China and Hong Kong accounted for 67% of packages entering the US under the exemption between 2018 and 2021.
PDD, Temu's parent company, was down 6% in premarket trading on the Nasdaq after the USPS announcement.
There were more than 1.36 billion de minimis shipments into the US in the 2024 fiscal year according to the US Customs and Border Protection.
The agency said in a January statement that shipments into the US under the exemption had risen by more than 600% over the past decade.
"This exponential increase has created challenges for CBP's effective enforcement of US trade laws, health and safety requirements, intellectual property rights, and consumer protection rules," the statement added.
US consumers can expect chaos with their packages, a trade specialist told Business Insider.
"There'll be disruption, there'll be cancellations, the next couple of days are going to be chaotic," said Ram Ben Tzion, the CEO of Ultra Information Solutions.
Chinese exporters could choose to use companies such as DHL, UPS, and FedEx β but this demand surge could cause freight costs to increase, said Ben Tzion. His company is behind Publican, a digital vetting platform for global trade.
Private freight companies may also start evaluating how they plan to handle inbound packages from China and Hong Kong.
"The suspension is actually sending a very strong message to FedEx, to UPS, to DHL that they also need to consider if they continue taking packages from China," Ben Tzion said.
He advised consumers to wait before carting out any products that are shipped out of China or Hong Kong.
"If you continue buying on Shein, Temu, Alibaba, or Amazon, I strongly suggest that you wait for the next week to see how it plays out, because it's going to be a mess," said Ben Tzion.
USPS declined to elaborate on its statement when contacted by BI.
Frederic J. Brown/AFP via Getty Images
The holiday season is here, and while delivery drivers work hard to ensure parcels reach their destinations on time, gift-givers can help by sending them before the shipping deadlines.
With Christmas less than two weeks off, there are mere days left to mail gifts to your loved ones. Carriers prep for the busy holiday time by hiring seasonal employees to assist drivers or deliver packages themselves.
In 2023, UPS said it'd hire 100,000 seasonal workers for the busy holiday season; this year, they said they're hiring more than 125,000. Although many carriers' deadlines allow for last-minute shipments β 48 hours before December 25 β it's best practice to get your gift shipped off as early as possible.
Here's when three big mail carriers say you need to ship your gifts by.
There were five fewer shopping days between Thanksgiving and Christmas this year, FedEx Executive Vice President and Chief Customer Officer Brie Carere noted in a press release. As such, FedEx says it is doing what it can to cut down on holiday shipping chaos.
FedEx is giving consumers until December 23 to ship their packages within the US, Mexico, Canada, or Puerto Rico for next-day delivery.
If using the United States Postal Service, consumers should mail their gifts by December 21 to arrive before Christmas in the US, but those shipping to Alaska and Hawaiian must have packages in by December 20.
December 16 is the deadline for shipping internationally to Asian and European countries.
It's unclear if shipping to Canada in time for Christmas is possible. USPS previously said mail service to Canada was suspended due to the ongoing postal worker strike, but Labor Minister Steven MacKinnon asked for Canada Post union employees to be ordered back to work on Friday, according to the Toronto Star.
Those shipping with UPS have until December 23 to mail their packages within the US or Canada using its Next Day Air service. Rates will depend on when you ship and where you're shipping to.
