U.S. Postal Service plans 6% peak season surcharge for parcels

The U. S. Postal Service on Tuesday proposed surcharges for domestic package delivery during the peak holiday season to cover extra handling costs, following the lead of large parcel carriers like FedEx and UPS that annually tack on holiday premiums.

The announcement adds to rising cost pressures felt by shippers this year, especially since the Iran war choked off many Middle East oil supplies and increased fuel prices. Rates for Priority Mail, Priority Mail Express, Ground Advantage and Parcel Select services will increase 6%, beginning Oct. 4 through Jan. 17, 2027, according to the proposal.

Last year’s peak season surcharge was about 4% to 5%, depending on the product. The temporary price adjustment will bring rates for retail and commercial customers in line with competitors and help the organization meet financial targets so it can remain solvent amid rising costs and declining mail volume.

The Postal Regulatory Commission must first review and bless the rate increase before it can be enacted. In April, the Postal Service slapped an 8% surcharge on parcel shipments to cover rising fuel and transportation costs. The fuel surcharge is also scheduled to last until Jan. 17.

Why It Matters: Parcel shippers are feeling the impact of add-on fees this year. Hikes in the fuel surcharge and new fees for heavier packages and premium services helped push up ground and express parcel costs by 5% to 6% in the second quarter, according to a report from AFS Logistics and TD/Cowen investment bank.

Many businesses are switching to independent carriers to hold the line on rising costs, analysts say. FedEx last month unveiled its demand surcharges for the peak shipping season and are layered on top of accessorial charges that have increased since last year. The fees, which are higher than the prior year, run from Oct. 26 to Jan. 17.

The FedEx (NYSE: FDX) surcharge helps to cover the cost of securing additional air and truck capacity during a period of high demand and higher operating costs, it said.

The largest percentage increases hit some of the most common delivery categories used by e-commerce shippers UPS has not announced demand surcharges for the upcoming season, but is expected to do so. DHL Express, in a rare industry reversal, on Aug.

3 cut its fuel surcharge index by a flat 2 points for export and import shipments, along with associated surcharges. Click here for more FreightWaves/American Shipper stories by Eric Kulisch. Write to Eric Kulisch at ekulisch@freightwaves. com.

RELATED STORIES: New parcel surcharge helps Postal Service reach $20B in revenue US Postal Service plans parcel price hikes in January The post U. S. Postal Service plans 6% peak season surcharge for parcels appeared first on FreightWaves.