USPS overhauls logistics network amid mounting financial pressures

The U.S. Postal Service (USPS) is rolling out a sweeping overhaul of its logistics and transportation network to slash costs and accelerate package delivery, even as Postmaster General David Steiner warns the agency faces a cash crunch by the end of the current fiscal year. Steiner, testifying before the U.S. Senate Committee on Homeland Security and Governmental Affairs, painted a stark picture of USPS’s financial health, projecting its unrestricted cash position could plunge to a negative $125.9 billion by fiscal year 2035 without structural reforms. He called the agency’s business model “broken” and urged Congress to either remove government-imposed mandates or compensate USPS for fulfilling them, arguing that the Postal Service could serve as a growth engine for the $2 trillion mailing industry. The overhaul centers on three pillars: regional processing and distribution centers (RPDCs), larger sorting and delivery centers (SDCs), and regional transportation optimization (RTO). USPS has invested nearly $20 billion to modernize facilities, automate package handling, and expand processing capacity. The agency aims to operate 60 RPDCs nationwide, launching three new hubs in Nashville, Tennessee; Oklahoma City; and Sacramento, California, on June 29. Existing RPDCs include locations in Atlanta, Birmingham, Boise, Charlotte, Chicago, Greensboro, Houston, Indianapolis, Jacksonville, Jersey City, Memphis, Phoenix, Portland, Richmond, and St. Louis. These centers replace a decentralized network that relied on excessive transportation trips between facilities. Package processing capacity has surged from 60 million in 2020 to 88 million in 2025 thanks to high-powered sorting equipment. USPS is also consolidating 19,000 local delivery units into fewer, larger SDCs equipped with modern package sorting tech, EV charging stations, and optimized routes. Fifteen-eight SDCs are already operational, with seven more slated to open by mid-July in Colorado, Florida, Idaho, Iowa, Minnesota, South Dakota, and Washington state. The third pillar, RTO, was fully implemented nationwide in July 2025 to align transportation schedules between processing facilities and post offices, improving efficiency without altering delivery routes. Steiner emphasized that these changes are part of a broader push for “operational precision” to modernize the agency’s aging infrastructure.