USPS Calling for First-Time Peak Season Surcharges on Parcels

The U.S. Post Office is taking the unprecedented step of seeking a peak surcharge in anticipation of huge holiday demand for ecommerce parcel shipping. If approved the increases would take effect from Oct. 18 to Dec. 27, ranging from an additional 24 cents to $1.50 more per package, across all its products.

Until now, temporary peak surcharges had been the domain of UPS and FedEx alone, and their implementation is another sign of the kinds of major performance improvement changes being implemented by new Postmaster General Louis DeJoy.

Earlier this month, UPS announced its own higher-than-expected peak surcharges on shippers with more than 25,000 packages per week during the holiday season, as a historically massive seasonal crunch is expected. The UPS increases will be as high as $3 more per package for ground shipments and up to $4 per package for air express. FedEx has yet to announce its peak rates.

The new pricing was approved by the USPS board of governors on Aug. 6, and now needs to go before the Postal Regulatory Commission (PRC) for final approval. Retail and international products are unaffected by the changes.

“This time-limited adjustment will increase prices for our commercial customers in line with competitive practices without impacting customers at the retail level,” the USPS said in a release. “In doing this, the Postal Service is protecting the retail consumer during a vulnerable economic period while increasing prices on commercial volume during heightened volume levels.”

The USPS price changes are as follows:

 

Product

 

Current

 

Planned Increase

Parcel Select Destination

Delivery Unit (DDU)

Starts at $3.19 24 cents
Parcel Return Service Starts at $3.05 24 cents
Parcel Select Lightweight Starts at $1.81 24 cents
FCPS Commercial Starts at $2.74 25 cents
Priority Mail Commercial Starts at $7.02 40 cents
Parcel Select Ground Starts at $6.92 40 cents
Parcel Select DSCF Starts at $4.37 40 cents
Parcel Select DNDC Starts at $5.98 40 cents
Priority Mail Express Commercial Starts at $22.75 $1.50

 

In its most recent quarter ended June 30, the USPS lost $2.21 billion, down from $2.26 billion a year earlier. Its so-called controllable loss, after backing out workers’ compensation adjustments and unfunded retiree health benefits, rose from $1.1 billion to $1.5 billion. Shipping and package revenue increased 53.6% or $2.9 billion to $8.3 billion, on a volume increase of 50% or 708 million pieces.