A Senate bill requiring the U.S. Postal Service to designate a single, unique Zip code for 83 communities would erase a $600 million quarterly performance improvement and add more than $800 million in costs, Postmaster General David Steiner told the Postal Service board of governors on Friday, according to FreightWaves. The estimate covers implementation expenses and service degradation not only in the affected Zip codes but in surrounding areas, the postmaster said.
What the Senate bill mandates
The legislation, S. 4505, was endorsed by the Senate Homeland Security and Governmental Affairs Committee by a 10-3 vote on Thursday, setting the stage for a vote by the full Senate, FreightWaves reported. Companion legislation passed the House of Representatives last year. The measure would force the Postal Service to give each of 83 communities its own unique Zip code, resolving situations where residents of one town share a Zip code with an adjacent community.
Advocates argue the lack of a uniform Zip code leads to misdelivered or delayed mail and slowed emergency response because drivers are confused about where to go, according to FreightWaves. Steiner urged Congress to reject the bill, saying it would cause what he called "irreparable harm" to the Postal Service and customers.
Affected communities: Urbandale, Iowa, and North Swanzy, New Hampshire
S. 4505 was sponsored by Sen. Joni Ernst, R-Iowa, who has worked for years to resolve the city of Urbandale's Zip code boundary dispute, which she said has created challenges for local businesses and services. New Hampshire's Senate delegation also backed the bill because residents in the neighborhood of North Swanzy complained their mail often went by mistake to addresses in neighboring Keene even though they live in Swanzy, FreightWaves reported.
Steiner said a better solution is a separate pilot-program bill already passed by the committee that would reform the process for Zip code modifications. That approach would require more explicit criteria, such as feasibility and impact studies of address changes, and a written rationale to local officials for rejected change requests.
The cost: $600 million gained, $800 million at risk
The USPS has lost $14.7 billion over the past 21 months, according to FreightWaves. In its most recent fiscal third quarter, the Postal Service posted a loss of $2.5 billion, slicing $584 million in losses from the same period in 2025.
| Metric | Figure | Source |
|---|---|---|
| USPS net loss, past 21 months | $14.7 billion | FreightWaves |
| Fiscal third-quarter loss | $2.5 billion | FreightWaves |
| Year-over-year loss reduction | $584 million | FreightWaves |
| Estimated cost of Zip code bill | $800 million+ | Steiner |
| Quarterly performance improvement | $600 million | Steiner |
| Communities affected | 83 | FreightWaves |
| Committee vote | 10-3 | FreightWaves |
| Postal workforce | 630,000 | Steiner |
Steiner framed the bill as a direct threat to recent operational gains, telling the board, "In a calendar quarter where our 630,000 hard working men and women struggled and strived to improve performance by $600 million, with a single action, with the stroke of a pen, Congress proposed to give it all away for no good reason. […] The Zip codes bill will not only eliminate the $600 million improvement, it will further erode our performance as we estimate costs from the bill to be well over $800 million." He added that the measure would affect service "not only for these ZIP codes, but for the areas around those ZIP codes."
Steiner also said: "Even as the Postal Service takes one step forward, Congress imposes yet another money losing mandate that pushes us two steps back. This process has to stop."
Implications for mailers and logistics operators
For freight forwarders, 3PLs, and shippers relying on USPS for last-mile delivery, the bill's passage would mean potential delivery disruptions across the 83 affected communities and their surrounding areas. The USPS's own estimates point to rising costs — well over $800 million — that could pressure rates or service levels elsewhere. The Postal Service's financial position is already strained, with $14.7 billion in losses over 21 months and a $2.5 billion quarterly loss.
Mailers handling parcels or correspondence into communities with split Zip codes should watch the Senate vote closely. If the bill becomes law, delivery times could lengthen for those communities and adjacent areas as the Postal Service implements new codes and reassigns routes. The alternative pilot-program approach, requiring feasibility studies and written justifications, would give operators more predictable timelines.
Watch list
- Full Senate vote: The committee's 10-3 endorsement moves S. 4505 to the Senate floor; the timing is not yet announced.
- Pilot program legislation: The separate reform package already passed by the committee could shape how future Zip code modifications are handled, including feasibility and impact studies.
- USPS financial reports: The Postal Service's next fiscal quarterly results will show whether it can sustain the $600 million performance improvement and whether the $2.5 billion loss shrinks further.
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