USPS files notice with Postal Regulatory Commission for temporary Peak Season rate hikes

Earlier this month, the United States Postal Service (USPS) said it has filed notice with the Postal Regulatory Commission (PRC), a concern responsible for oversight of the United States Postal Service (USPS), including oversight of rates and services, and ensuring the Postal Service meets all of its legal requirements, in regards to a temporary price change for various package services for the 2025 peak holiday season.

USPS said that the objective of temporary price adjustment, “is to help cover extra handling costs to ensure a successful peak season.” And it added that this planned pricing for peak season was approved by the USPS governors on August 7 and will affect prices in the following categories: Priority Mail Express (PME), Priority Mail (PM), USPS Ground Advantage; and Parcel Select.

Should the PRC sign off on these price changes, they would take effect on October 5 and remain through January 18, 2026, with USPS adding that it would bring prices for its retail and commercial customers “in line with competitive practices.”

USPS said the planned price increases are composed of the following for commercial Priority Mail Express (PME), Priority Mail (PM), USPS Ground Advantage; and Parcel Select:

• $0.30 increase for commercial PM, USPS Ground Advantage (Zone1-4) and Parcel Select, for 0-3 lbs. and up to a $3.00 increase for 26-to-70 lbs., and $0.70 for Zones 5-9, for 0-3 lbs. up to a $6.50 increase, for 26-to-70 lbs.;
• $1.25 for PM Flat Rate for large flat rate boxes and $0.70 for all other flat rate boxes;
• USPS Ground Advantage Zone 5-9, $0.35 cents increase for Zones 5-9, 0-3 lbs. up to a $5.50 increase for 26-to-70 pounds; and
• $1.00 PME increase for Zones 1-4, for 0-to-3 lbs., to a $13.00 increase for Zones 5-9, for 26-to-70 pounds, among others

Adi Karamcheti, Consultant, Professional Services for San Diego-based Shipware, told LM there are several takeaways from this announcement, most notably that by increasing rates, USPS endeavors to reduce the gap between it and the parcel duopoly of UPS and FedEx.

“While it [USPS] is still going to be the cheaper option in most cases, it shows that it is matching UPS and FedEx on these seasonal charges, and that it could be standard practice for them just like it is for FedEx and UPS,” he observed. That helps USPS, of course, but also sends the message that switching to them as a ‘carrier of last resort' will have a cost impact. The fees USPS is charging are flat fees as opposed to the volume-based Demand/Peak fees FedEx and UPS are using, and it's easier to calculate the impact of those flat fees, which is a plus for USPS.”

And Rick Watson, Founder and CEO of New York-based RMW Commerce Consulting, likened these proposed USPS rate hikes to a look into the future.

“USPS under new leadership and not much help from the Administration needs to be able to survive, and cost increases are the only way to survive if their obligations are not going to be restructured soon,” said Watson. “I imagine UPS and FedEx will take a look at these rates and use it to prime the pump for their own upcoming December and January rate increases, too.”

In its third quarter fiscal year 2025 earnings issued last week, the USPS saw a steeper net loss, at $3.1 billion, than the $2.5 billion reported a year ago, for the quarter. Operating revenue, at $18.8 billion was basically flat on an annual basis, up 0.2%. The USPS attributed the slight increase to price increase for its First-Class Mail category and also a product mix shift toward what it called higher-value offerings in its Shipping and Packages group—which it said was partially offset by declining First-Class Mail and Shipping and Packages.  Total quarterly volume, at 25.822 million pieces, rose 2.8% annually.