Postal Service (USPS) announced plans Thursday to raise shipping rates early next year, just days after reporting a $6.5 billion fiscal loss. The Board of Governors approved changes this week that will increase domestic shipping prices for Priority Mail, Priority Mail Express, USPS Ground Advantage, and Parcel Select by an average of 5.9 percent. The changes go into effect on January 17, 2027.
International rates—including Priority Mail Express International, Priority Mail International, First-Class Package International Service, and International Priority Airmail—will climb by approximately 7.9%. First-class mail rates and stamp prices will remain unchanged. In addition to the baseline rate hikes, the USPS announced that an 8 percent transportation-related surcharge introduced in April will become a permanent fuel surcharge.
Coupled with an additional 3 percent increase due to higher fuel costs, the total surcharge will rise to 11 percent. The surcharge does not currently affect international products and will be reevaluated in July 2027 based on fuel price trends throughout the first half of the year. The rate adjustments follow a fiscal statement released Tuesday detailing the agency's $6.5 billion loss in fiscal year 2026.
Although the deficit is an improvement over the previous year's $9 billion loss, Postmaster General David Steiner acknowledged that the persistent financial drain has left the agency in critical condition. House of Representatives that the agency could run out of funds within months unless action is taken. "We are borrowing from our employees’ retirement funds to continue operations.
The Postal Service has a broken business model and action is needed by Congress to fix it." During a House appearance in August, Steiner warned that postal deliveries could halt altogether in 2027 if funding goals were unmet, describing April’s emergency fuel surcharge amid the U.S.-Iran war as a last-resort cash-raising measure. Following that surcharge and a recent agreement with DHL eCommerce for last-mile parcel delivery services, the agency is now projected to remain operational until at least 2031. USPS has been reporting net losses of around $120 billion since 2007, after its biggest money-maker, first-class mail, saw a sharp decrease in usage following the shift to digital communications.
The Postal Service delivers to 170 million addresses six days a week, costing the agency $3.4 billion a year, Steiner said. Seventy percent of routes lose money, and around 58 percent of its 18,000 post offices are also unprofitable. President Donald Trump has previously floated the idea of either privatizing the Postal Service or merging it with the Department of Commerce.
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