US Postal Service seeks temporary 8% price hike to address fuel costs

The U.S. Postal Service said on Wednesday it is seeking approval for a temporary 8% price hike for priority mail and package deliveries, effective April 26, to deal with rising transportation fuel costs.

The USPS, which needs approval from the Postal Regulatory Commission for the temporary price increase, said the surcharge will provide a "bridge to a permanent mechanism to reflect market conditions in prices for competitive products" and comes as USPS has warned it could run out of money as soon as October.

The hike will not affect the price of first-class stamps.

USPS said FedEx and UPS have imposed fuel surcharges of 25% to 28% for ground and air deliveries since the start of the Iran war as a result of the jump in oil prices, including sharp rises in jet fuel and diesel.

"Transportation costs have been increasing, and our competitors have reacted with a number of surcharges," USPS said. "We have steadfastly avoided surcharges and this charge is less than one-third of what our competitors charge for fuel alone."

USPS plans for the surcharge to be in effect through January 17 of next year, by which time the agency will determine whether a different long-term approach is needed.

U.S. Postmaster General David Steiner told Congress earlier this month that hiking first-class mail stamp prices to 95 cents or $1 or more, up from the current 78 cents, would provide added revenue and help it cut losses.

Stamp prices are up 46% since early 2019, when they were 50 cents, but Steiner said they are still far lower than in other countries. USPS has reported net losses of $118 billion since 2007 as first-class mail, its most profitable product, has fallen to its lowest volume since the late 1960s.