USPS Proposes Surcharge on Packages to Cover Rising Transportation Costs

The U.S. Postal Service (USPS) has proposed adding a surcharge for fuel and other transportation costs to some of its products for shipping packages.

The proposed price change would add 8% to the base postage prices on Priority Mail Express, Priority Mail, USPS Ground Advantage and Parcel Select, the organization said in a Wednesday (March 25) press release. It would last from April 26 until Jan. 17, 2027.

The proposal is subject to review by the Postal Regulatory Commission (PRC), according to the release.

The USPS said in the release that the price change would align its costs of transportation with the market and help it cover the actual costs of doing business, as required by Congress.

It added that while this change would be time-limited, the USPS may adopt a permanent mechanism to make its prices reflect market conditions.

“Transportation costs have been increasing, and our competitors have reacted with a number of surcharges,” the USPS said in the release. “We have steadfastly avoided surcharges and this charge is less than one-third of what our competitors charge for fuel alone, so even with this change, the Postal Service continues to offer great value in shipping with some of the lowest rates in the industrialized world.”

Postmaster General and CEO David Steiner told a congressional committee on March 17 that inflation continues to impact the price of goods and services, including transportation.

“Even as inflation moderates, it continues to contribute to higher compensation expenses, higher workers’ compensation costs and elevated operating expenses,” Steiner said in a statement delivered to the committee.

FedEx said during a Thursday (March 19) earnings call that surging fuel prices is among the macro challenges the company is facing.

The Wall Street Journal reported Wednesday that the USPS’ proposed fuel surcharge would be the first one ever imposed by the organization.

The report added that FedEx, UPS and other parcel carriers have imposed fuel surcharges as well as other surcharges and fees for years.

The WSJ reported Friday (March 20) that FedEx and UPS update their fuel surcharges each week and that during the early weeks of March, these surcharges amounted to as much as 26% of the overall shipping cost.