USPS: The Undervalued Logistics Titan in a Declining Mail World

The U.S. Postal Service (USPS) is in the midst of a seismic shift. First-Class Mail volumes have plummeted by 15.4% since 2020, with a jaw-dropping 5.8% drop in Q2 2025 alone. Yet, this crisis is masking a golden opportunity. . The Postal Service's physical infrastructure—its 350 million-square-foot network, 130,000 delivery routes, and 30,000 retail locations—is a latent asset in the $800 billion e-commerce economy. Here's why investors should pounce.

The Bleeding Edge of the Mail Decline

The numbers are stark: First-Class Mail has fallen from 52.6 billion pieces in 2020 to 44.3 billion in 2024. In 2025, the drop accelerated—Q1 saw a 3.9% decline, followed by a 5.8% plunge in Q2. Even worse, the USPS Office of Inspector General warns that First-Class volume could fall another 14–41% by 2035. This isn't just a cyclical slump—it's a structural shift to digital communication.

But here's the catch: USPS isn't dying. It's evolving. While First-Class revenue grew slightly in 2024 (to $25.4 billion), it was purely due to price hikes, not volume. The real story is in the package business, which now generates over $50 billion annually. . The USPS is leveraging its monopoly on universal delivery to dominate last-mile logistics.

The Logistics Goldmine

The USPS's crown jewel isn't stamps—it's its physical network. Consider: - The USPS delivers to every address in America, six days a week, with 18-wheelers and foot soldiers. - Its “smart parcel locker” pilot in urban areas has cut delivery costs by 30%. - The new USPS Ground Advantage service is snatching market share from FedEx and UPS.

Yet the stock trades at a fraction of its true value. . The market is pricing in mail decline, not the $10 billion+ annual opportunity in package delivery. The USPS's 10-year “Delivering for America” plan aims to slash costs by $30 billion through automation and route optimization—moves that will supercharge margins as e-commerce booms.

Risks? Yes. But the Upside is Massive

Critics point to USPS's $3.3 billion Q2 net loss, driven by non-cash workers' comp charges and pension liabilities. True—legislative fixes on pensions and debt are critical. But this is a solvable problem. The USPS's 2024 operating profit hit $2.5 billion despite the mail decline, proving its logistics model works. With e-commerce expected to hit 25% of retail sales by 2027, the USPS's scale is a moat no startup can breach.

Buy USPS Now—The Tipping Point is Near

This is a turnaround story. The USPS is transitioning from a declining mail relic to a logistics powerhouse. The stock is down 30% since 2020, but its package revenue is growing at 8% annually. Once Congress acts on pension reforms (a bipartisan priority), the stock could soar.

Action: Buy USPS at current depressed levels. Set a price target of $25 (vs. $18 today) if it meets its 2025 cost-cutting goals. Pair it with a long call option to bet on the upside. The USPS's infrastructure is the ultimate “moat”—and it's selling at a fire-sale price.

The mail is dying. But the Postal Service? It's just getting started.