USPS is Temporarily Raising Prices for Commercial Packages

If you ship with USPS, it may be time to temporarily adjust some of your products’ prices. Earlier today (August 14th), USPS announced an incremental rate increase for all package services in the organization’s Commercial Pricing tier. USPS filed notice with the Postal Regulatory Commission for these changes to take effect from October 18th to December 27th. The Postal Service is raising prices for all package services it offers at Commercial Pricing rates, while the Retail rate (aka the rate that one pays at the Post Office) will remain the same.

The Commercial Services for Which USPS is Raising Prices (and the Increase for Each One)

Below, we’ve listed out the Commercial package services that USPS is raising prices for. We’ve also listed the amount by which each service will increase beginning on October 18th. The price changes are essentially flat increases across the board, which you can see here:

• First Class Package Service – Increasing by 25 cents
• Priority Mail – Increasing by 40 cents
• Priority Mail Express – Increasing by $1.50
• Parcel Select Ground – Increasing by 40 cents

These increases on the above services are essentially surcharges, although USPS will deliberately never call them that. With these price increases, the Board of Governors believe USPS will remain competitive while generating much needed additional revenue. Obviously, the forecasted revenue increase will all depend on the number of packages shipped between October 18th and December 27th at Commercial Pricing rates.

Why Is USPS Temporarily Increasing Rates for Commercial Packages, and Not Retail?

Due to the Coronavirus pandemic and greater demand for online shopping, USPS has seen a huge increase in package volumes. In fact, as people maintain social distance and continue sheltering in place, the entire eCommerce industry has surged during the pandemic. However, more package volumes translates to more expenses for the Postal Service and other shipping carriers. USPS is temporarily raising its prices in response to these increased expenses, heightened package demand, and an expected surge in holiday eCommerce orders.

USPS is only raising Commercial rates because the organization doesn’t wish to impact customers at the retail level. By keeping retail rates unchanged while increasing prices on Commercial packages during heightened volume levels, USPS believes they are protecting the retail consumer during a vulnerable economic period and generating critical additional revenue at the same time.

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