Dive Brief:
- The U.S. Postal Service plans to raise the prices of multiple shipping services on Jan. 21, 2024, amid continued financial struggles and volume losses, the agency announced Wednesday.
- Rates are slated to increase for USPS Ground Advantage, Parcel Select, Priority Mail and Priority Mail Express, according to a filing with the Postal Regulatory Commission, which will review the adjustments.
- Prices for Connect Local, the Postal Service's same-day and next-day local delivery service, will remain unchanged.
U.S. Postal Service rate hikes effective Jan. 21, 2024
| Service | Rate increase |
|---|---|
| USPS Ground Advantage | 5.4% |
| Priority Mail | 5.7% |
| Priority Mail Express | 5.9% |
| Parcel Select | 5.9% |
| Connect Local | None |
Source: U.S. Postal Service. The price increases are pending Postal Regulatory Commission review.
Dive Insight:
The U.S. Postal Service's rate hikes follow the 5.9% average increases announced by UPS and FedEx earlier this year, but the agency said in a news release that it remains an affordable alternative to top carriers.
"The Postal Service continues to offer a great value in shipping," the Postal Service said. "Unlike some other shippers, the Postal Service has upfront pricing and does not add surcharges for residential and regular Saturday delivery, nor fuel."
The agency is highlighting Ground Advantage in particular as a worthy competitor to similar offerings from FedEx and UPS. The service launched in July as the Postal Service's flagship ground package service, replacing existing shipping services in First-Class Package Service, Retail Ground and Parcel Select Ground. It provides package delivery in 2 to 5 business days across the continental U.S.
The Postal Service's rate increase announcement came one day after it revealed a net loss of $6.5 billion in fiscal year 2023, which ended Sept. 30. The agency attributed the results in part to inflationary pressures. While revenue for shipping and packages increased 1% year-over-year, that segment saw a volume decline of 2.4%.
Despite reduced demand, the agency views increasing its share of the parcel delivery market as a critical part of its long-term transformation strategy. It expects to grow its package business by over $1 billion in 2024, Postmaster General and CEO Louis DeJoy said in prepared remarks Tuesday at a USPS Board of Governors meeting.
"Our goal is to reduce costs by improving our operational precision through the deployment of modern-day logistics strategies and suitable operational assets to compete for a growing share of the growing package market," DeJoy said.
The Postal Service is also updating "Merchant Rate Card" prices on e-commerce platforms that are part of its Connect eCommerce program, which offers discounted pricing for shipping, the Postal Service said in an emailed statement. Participating platforms and marketplaces include eBay, Shippo, PitneyShip, Stamps.com and Shopify.
The adjustments will be in place by Saturday. They vary by Merchant Rate Card, with some prices decreasing for Ground Advantage and some prices increasing for Priority Mail, the Postal Service said.
Merchant Rate Card prices are generally lower than commercial published prices for Ground Advantage and Priority Mail.
