Marketing Mail Grew 4.3% Even as USPS Lost $2.5 Billion
The U.S. Postal Service reported a $2.5 billion net loss for the third quarter of fiscal year 2026, but one part of its business moved in the opposite direction. Marketing Mail volume increased 4.3%, adding 574 million pieces compared with the same quarter last year. Revenue from the category increased 12.3%, or $440 million.
Those numbers matter because they separate the Postal Service’s financial crisis from the actual demand for advertising mail. USPS remains under serious financial pressure, but Marketing Mail is not disappearing. During the quarter covering April through June 2026, businesses sent approximately 13.8 billion Marketing Mail pieces, up from 13.2 billion a year earlier.
The Quarter in Numbers
USPS generated $19.9 billion in total operating revenue, an increase of $1.1 billion, or 6.1%, from the same quarter in fiscal 2025. Total mail and package volume reached 25.4 billion pieces, a modest increase of 0.4%.
Marketing Mail was the clearest source of volume growth. Its 4.3% increase contrasted with a 3.5% decline in First-Class Mail volume and a 3.4% decline in Shipping and Packages volume. First-Class Mail lost 343 million pieces compared with the prior-year quarter.
Revenue requires more context. Marketing Mail revenue climbed 12.3%, considerably faster than its volume, because the results also reflect postal price increases. First-Class Mail offers an even clearer example: revenue increased 4.3% despite its 3.5% volume decline. Higher revenue therefore does not automatically mean stronger customer demand.
The Marketing Mail volume increase is harder to dismiss. An additional 574 million pieces physically entered the postal network. That represents actual mailing activity, not a gain created solely by higher rates.
A Growing Mail Category Inside a Financially Troubled Network
The strong Marketing Mail quarter did not come close to eliminating USPS’s broader financial problems. Operating expenses totaled $22.5 billion, up 2% from the previous year. USPS attributed the increase primarily to retirement and retiree health benefit expenses, compensation costs, fuel prices and transportation expenses.
The $2.5 billion net loss was an improvement over the $3.1 billion loss reported for the same quarter last year. USPS also reported that its controllable loss improved from $1.6 billion to approximately $1 billion. Even so, the organization described its liquidity position as precarious and said temporary cash-conservation measures do not provide a long-term solution.
That distinction is important for the mailing industry. USPS can be financially unstable while direct mail remains commercially useful. The Postal Service must support a nationwide delivery network, manage large employment and retirement obligations, and serve more addresses even as traditional correspondence continues moving online. Marketing Mail performance reflects advertiser demand, while the overall loss reflects the cost and structure of the entire postal operation.
What the Increase Says About Direct Mail
The quarter does not prove that Marketing Mail will grow indefinitely. Mailing volumes can shift with the economy, seasonal campaigns, postal rates and the activity of a relatively small number of large mailers. One quarter should be treated as a current demand signal rather than a permanent reversal of every long-term postal trend.
Still, the results challenge the assumption that physical advertising is collapsing alongside personal and business correspondence. First-Class Mail continues to lose volume as bills, statements and routine communication move online. Marketing Mail serves a different purpose. It places a physical promotion, offer or catalog directly in a household, where it can support retail traffic, fundraising, customer acquisition and repeat purchases.
For marketers, the practical question is whether a mailing produces enough response to justify its cost. The 4.3% volume increase suggests that many organizations still believe the answer is yes.
Why This Matters for Variable Data Printing
As postage and production costs rise, sending the same generic piece to every address becomes harder to justify. Mailers need stronger targeting and more relevant content. Variable data printing can change names, addresses, offers, geographic details, QR codes, barcodes and tracking information from one piece to the next. That allows a campaign to divide a large mailing into more specific audiences without stopping production for separate static versions.
Digital Print, Inc. supports these applications with industrial inkjet systems that can add changing text and codes to existing mail and print production lines. For mail providers, inline variable printing can help turn a high-volume Marketing Mail campaign into a collection of targeted communications while preserving production speed.
USPS’s financial condition remains a real concern. Future rate increases, service changes or legislative decisions could affect mailing costs and planning. The current quarter nevertheless delivers a clear message: the institution carrying the mail is under strain, but advertiser demand for the mail itself has not collapsed.
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