Price hike for US Postal Service? Could add 11% surcharge for domestic priority mail, package deliveries in January

The United States Postal Services, more commonly known as USPS, is planning to charge a 11% fee on package deliveries in order to meet rising fuel costs and transportation expenses, Reuters reported.

In its statement, the service said that it had initially not planned to hike the price of first-class stamps in January, which rose in July from 78 to 82 cents. And that the surcharge is rising from a temporary 8% surcharge that was imposed in April, the report said

Fuel, transportation expenses hit US post companies

USPS said this week its transportation expenses in the 12 months ending 30 September rose by $225 million due to higher fuel costs, it added.

The fuel surcharge hike was first imposed after diesel prices hit record highs due to the war in Iran and costs have continued to increase throughout the year, according to a Bloomberg report.

Shares of parcel giants USPS fell 1% and FedEx Corporation 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, it added.

What could change for USPS customers?

The USPS on Thursday said it has approached the Postal Regulatory Commission for approval for apply 11% fuel surcharge for domestic priority mail and ‌package deliveries in January, the Reuters report added.

According to a Bloomberg report, certain domestic shipping services also will increase by an average of 5.9% — in line with the typical annual rate changes that other large parcel carriers have announced for the year ahead.

It added that 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.

Steiner has also asked Congress for help solving some of the agency’s structural financial issues, it added.

(With inputs from Agencies)