USPS Proposes Peak Season Surcharges for Parcel Services

U.S. Postal Service (USPS) (Photo: Veeqo / Phaata)

On Friday, the U.S. Postal Service (USPS) announced plans to implement surcharges for its parcel delivery services during the peak holiday season to offset extra handling costs, a decision likely to draw more complaints from groups that argue rates are already rising too quickly.

The price spikes apply to Priority Mail Express, Priority Mail, Ground Advantage, and Parcel Select products. The fees vary by shipping distance and weight, as well as for retail and commercial customers. The average increase for Priority Mail is 4.1%, with an average surcharge of 5.1% for Ground Advantage. For example, a long-distance USPS Ground Advantage package could cost between 35 cents and $5.50 more. Pending approval by the Postal Regulatory Commission, the temporary increases will begin at midnight on October 5 and remain in effect through January 18.

The agency said the seasonal adjustment will bring the Postal Service's retail and commercial customer pricing on par with private-sector competitors. It also implemented peak season surcharges last year. FedEx and UPS regularly apply demand-driven surcharges for the busiest shipping season.

The Board of Governors approved the peak season rates during a meeting on Thursday, where officials also presented third-quarter financial results.

The postal operator posted a $3.1 billion loss for the third quarter of its fiscal year, which ended June 30, the result of rising costs, lower volumes, and non-cash accounting adjustments. The loss would have been $1.6 billion without factoring in legislatively mandated expenses outside the USPS's direct control.

This decade, USPS leadership has focused on the need to increase revenue through price adjustments as part of its long-term transformation plan to improve service and achieve financial stability. The postal operator last increased mail prices on July 13. Business groups like Keep US Posted have complained that the frequency and size of postage rate hikes have contributed to volume declines.

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Source: Phaata.com (According to Freight Waves)

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