USPS Seeks 11% Package Price Hike for January as Fuel Costs Climb

The US Postal Service said on Thursday it is seeking approval for an 11% price rise on domestic priority mail and package deliveries in January, blaming higher fuel costs for the latest increase.

The agency needs approval from the Postal Regulatory Commission before the change can take effect. It said it was not planning to raise the price of first-class stamps in January. The stamp rose in July from 78 cents to 82 cents.

The proposal lands at a difficult moment for the Postal Service, which is also asking Congress for $2 billion in support and warning that post offices could face cuts if lawmakers refuse to help.

What the proposal would change

The 11% figure would replace a temporary 8% surcharge on package prices that was imposed in April. The Postal Service said it was proposing to raise overall domestic shipping service prices by 5.9% on average, and international deliveries by an average of 7.9%.

The surcharge covers four domestic shipping products: Priority Mail Express, Priority Mail, USPS Ground Advantage and Parcel Select. The agency’s governors approved the earlier 8% adjustment in March, and it was due to expire in mid-January 2027, leaving the Postal Service to decide on a longer-term approach.

For households and small businesses that rely on the post for parcels, the change would mean higher costs at the start of the new year, just as the holiday shipping season ends. The Postal Service has not said exactly how much individual services would rise, because the final prices still depend on the regulator’s decision.

Fuel bills behind the rise

The Postal Service said this week that its transport expenses in the 12 months ending 30 September rose by $225 million because of higher fuel costs.

Diesel prices have climbed sharply. The national average price of diesel was $6.10 a gallon on Thursday, up from $3.76 a year ago, according to AAA. Fuel is one of the largest running costs for a delivery network that moves mail and parcels to every address in the country, six days a week.

The agency’s finances have been under strain for years, and rising costs have made the gap harder to close. First-class mail, its most profitable product, has fallen to its lowest volume since 1965 as consumers have moved to digital communication, while the Postal Service must still pay for costly nationwide delivery.

A service deep in the red

The Postal Service reported an annual net loss of $6.5 billion for the year ending 30 September, compared with a $9 billion loss in the previous 12 months. It has recorded net losses of more than $120 billion since 2007.

Postmaster General David Steiner has said the agency has a broken business model and needs help from lawmakers to turn its operations around. In May, the Postal Service suspended non-essential spending on travel, office supplies and consultants. Earlier this year it also temporarily suspended employer payments for a federal pension programme.

The losses have persisted despite repeated price rises. The Postal Service has raised stamp and package prices several times in recent years, but the savings have not been enough to cover the cost of running a network that is required by law to deliver to every home and business in America.

Congress asked for $2 billion

On Tuesday, the Postal Service asked Congress for $2 billion in support and reimbursements for what it describes as unfunded requirements imposed on it. Its head warned the agency would be forced to make significant cuts in retail post offices and other reductions unless lawmakers act.

The new Democratic-led Congress, which takes office in January, will need to decide whether to help the Postal Service. Republicans held a series of hearings over the last two years on its finances, and the agency wants $2 billion from Congress for unfunded requirements it has imposed.

For now, the January price proposal sits with the Postal Regulatory Commission. If it is approved, parcels will cost more from the new year, while the price of posting a letter stays put — at least for now.