Cailley LaPara
Bloomberg News
(TNS)
The U.S. Postal Service is moving to raise and make permanent its fuel surcharge, which the agency introduced for the first time earlier this year.
The fuel surcharge will increase to 11% from 8% starting in January, the USPS said in a statement Thursday. Certain domestic shipping services also will increase by an average of 5.9%. That adjustment is in line with the typical annual rate changes that other large parcel carriers have announced for the year ahead.
The fuel surcharge hike comes after diesel prices hit record highs due to the war in Iran. The USPS implemented its first-ever fuel related fee in April, soon after the war started and diesel prices jumped. Costs have continued to increase throughout the year.
Shares of parcel giants United Parcel Service Inc. fell 1% and FedEx Corp. slipped less than 1% on Thursday after the Postal Service announced the planned price hikes. Both companies are contending with similar cost headwinds and are leaning heavily on pricing to boost revenue.
The announcement comes days after the USPS reported annual financial results which showed that the agency lost $6.5 billion in fiscal year 2026, compared with $9 billion the year prior.
The USPS faces a dire financial situation due to its massive operational costs and waning mail volume. Postmaster General David Steiner has said the agency could run out of money as soon as February, and has halted discretionary spending and certain retirement contributions to stave off a liquidity crisis. He has also asked Congress for help solving some of the agency’s structural financial issues.
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Tags: economy, mail, post office, postage, postal service, surcharge, USPS
