Brazil’s Postal Service Bleeds Billions While Private Couriers Take The Profits

Brazil’s state-owned postal company, Correios, is losing money at a pace that surprises even seasoned observers.

From January to September 2025, it racked up losses of about R$ 6.1 billion ($1.1 billion), almost three times the R$ 2.1 billion ($0.4 billion) deficit in the same period of 2024 and already well above the full-year 2024 loss of R$ 2.6 billion ($0.5 billion).

Behind those numbers is a business model squeezed from both sides. Revenue in the first nine months dropped 12.7 percent, from roughly R$ 14.1 billion ($2.6 billion) to R$ 12.3 billion ($2.3 billion).

International parcels shrank after new taxes on low-value imports and changes at airports, which helped competitors.

Private logistics companies moved quickly, taking the most profitable e-commerce routes and leaving Correios with low-margin or loss-making deliveries.

Costs moved in the opposite direction. General and administrative expenses jumped from around R$ 3.1 billion ($0.6 billion) in 2024 to R$ 4.8 billion ($0.9 billion) this year.

Court-ordered payments and small claims soared from about R$ 483.6 million ($90 million) to R$ 2.1 billion ($0.4 billion), mainly from labor disputes.

Brazil’s Postal Service Bleeds Billions While Private Couriers Take The Profits

Payroll became heavier after a 4.11 percent wage increase and a costly voluntary redundancy program.

Because Correios must serve every municipality, it carries fixed costs that private rivals can simply avoid.

The official response is a new rescue plan financed with more debt. The company is negotiating up to R$ 20 billion ($3.7 billion) in bank loans, plus possible funds from a multilateral lender and sales of unused real estate worth about R$ 1.5 billion ($0.3 billion).

The promise is to stabilise cash now, then close or merge weak branches, modernise IT and logistics, and return to growth after 2027. What is not on the table, for now, is any serious opening to private ownership.

For expats and foreign investors, this is more than a story about slow parcels. Correios still underpins deliveries in remote Brazil, so its weakness affects businesses and consumers far from big cities.

Its mounting deficit also feeds the wider pressure on Brazil’s public finances. The deeper story is about a government trying to defend a large state company while struggling to impose hard budget limits, leaving taxpayers and bondholders to absorb the cost of delay.