U.S. Postal Service executives could be stripped of bonuses unless on-time mail delivery reaches 95% after the Senate Homeland Security and Governmental Affairs Committee approved the bipartisan No Bonuses for Bad Service Act last week, FreightWaves reported. The measure could be considered by the full Senate when it returns to work next month.
The legislative pressure comes as the Postal Service missed its on-time target in all eight mail delivery categories in fiscal year 2025, none of which hit the 95% threshold, according to the agency's annual report. Single-piece First-Class mail scheduled for three-to-five-day delivery arrived on time only 72.7% of the time, while marketing mail, periodicals and pre-sort First-Class overnight mail scored 93%, FreightWaves reported.
Bill would tie bonuses to 95% on-time threshold
FreightWaves reported that the No Bonuses for Bad Service Act, sponsored by Sen. Josh Hawley, R-Missouri, and Sen. Richard Blumenthal, D-Connecticut, would prohibit the USPS Board of Governors from approving any additional compensation for the postmaster general and his deputy for any fiscal year in which the Postal Service does not meet or exceed a 95% on-time delivery rate for all First-Class and standard mail. The entire Alabama delegation in the House introduced similar legislation in late July tying the postmaster general's compensation to mail delivery and financial performance, according to FreightWaves.
Postmaster General David Steiner urged senators to reject the bill ahead of the committee vote, saying in a private letter that freezing bonuses would be counterproductive, FreightWaves reported. Steiner, who took office a year ago, has already received a $170,000 bonus. At a June 24 hearing, Hawley challenged Steiner to explain why postmaster generals have received more than $2 million in bonuses over the past 10 years while delivery and financial performance declined.
Delivery performance lags target
The Postal Service says it has seen steady improvement since aligning staffing to workflow, addressing process improvements and retraining at the facility level, and taking other measures in 2025, according to FreightWaves. That renewed focus on reliability coincided with a reorganization of the regional transportation network, which required loosening some delivery standards in rural areas and led some to complain of slower mail delivery, FreightWaves reported. Steiner said Friday during a board of governors' meeting that his organization has increased service performance by better leveraging the network.
The agency's annual report shows the gap between current performance and the proposed 95% threshold:
| Mail category | FY2022 on-time | FY2025 on-time | 95% target |
|---|---|---|---|
| First-Class mail (FY2022 overall) / Single-piece First-Class (FY2025) | 91% | 72.7% | 95% |
| Marketing mail | 93.3% | 93% (with periodicals and pre-sort overnight) | 95% |
The FY2022 figures come from a progress report on the Postal Service's 10-year restructuring and modernization plan, while the FY2025 figures are from the agency's annual report, FreightWaves reported.
At the June 24 hearing, Hawley pressed Steiner on Missouri-specific targets:
Your targets for on time delivery in my state, which were not good to begin with, are just in the 90s, meaning you could miss it 10% of the time and give yourself an A grade. But start looking there in 2024, 2025. You're hitting your on time delivery targets 76% of the time — maybe. That means fully a quarter of the time, best case scenario, people's mail in my state is not being delivered to them on time.
Steiner said those metrics are unacceptable but countered that the postal operator is producing better service results nationwide, FreightWaves reported.
Financial losses mount as service slips
The Postal Service has lost $25 billion over the last three years, and on Friday reported a $2.5 billion third-quarter loss, down from a $3.1 billion loss the prior year, according to FreightWaves. Hawley has launched an investigation into systemic delivery failures and abandoned mail in Missouri, where a large pile of undelivered mail was discovered in April in a vacant lot near St. Louis, with many postmarks indicating letters were only going across town, FreightWaves reported.
Hawley has taken up the cause for rural citizens who say years of delays and missing mail are creating a financial burden — when they do not receive bills or paychecks — and jeopardizing their health when prescription medicines arrive late, according to FreightWaves.
Implications for last-mile operators
For logistics managers and last-mile operators, the FY2025 figures mean nearly a quarter of single-piece First-Class mail misses its three-to-five-day service standard, FreightWaves reported. The bill, if enacted, would give the postmaster general a direct financial incentive to reach the 95% target, but Steiner's private letter argues that freezing bonuses would be counterproductive. The Postal Service attributes its improvement efforts to staffing alignment, facility-level retraining and process improvements, while the regional network reorganization has loosened delivery standards in rural areas, FreightWaves reported.
The outcome of the Senate vote and the continuing Missouri investigation will shape whether executive compensation is formally tied to service metrics, but the underlying delivery data already shows the scale of the gap between current on-time rates and the proposed benchmark.
Watch list
- The full Senate could consider the No Bonuses for Bad Service Act next month, FreightWaves reported.
- Hawley's investigation into systemic delivery failures and abandoned mail in Missouri is ongoing, according to FreightWaves.
- Steiner's statement that the Postal Service is producing better service results nationwide and his opposition to the bill will be tested against the agency's next on-time performance data, which missed the target in all eight categories in fiscal year 2025, FreightWaves reported.
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