US Postal Service Requests Temporary Holiday Season Rate Increase

The U.S. Postal Service filed notice with the Postal Regulatory Commission (PRC) of a temporary price change to take effect on October 18, 2020.

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The planned temporary price adjustments are in response to increased expenses and heightened demand for online shopping package volume because of the coronavirus pandemic and expected holiday eCommerce.

As a result of these changing market conditions, the Postal Service is planning a time-limited price increase on all commercial domestic competitive package volume from October 18 until December 27, 2020.

Retail prices and international products will be unaffected.

The planned price increase would go into effect at 12:00AM Central on October 18, 2020 and remain in place until 12:00AM Central Dec. 27, 2020.

The planned prices, approved by the Governors of the Postal Service on August 6, would raise prices on its commercial domestic competitive parcels – Priority Mail Express, Priority Mail, First-Class Package Service, Parcel Select, and Parcel Return Service.

Impacts Commercial Customers and Marketplace Sellers

This time-limited adjustment will increase prices for our commercial customers in line with competitive practices without impacting customers at the retail level.

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.

No structural changes are planned as part of this limited time pricing initiative, allowing customers to implement the new prices with minimal complexity.

The Governors believe these temporary rates will keep the Postal Service competitive while providing the agency with much-needed revenue.

If favorably reviewed by the PRC, the planned price adjustments for most rates would range from 24 cents to 40 cents on ground and select Priority Mail services and $1.50 on Priority Mail Express services.

The US Postal Service issued a Planned Price List with an effective date of October 18, 2020, that includes the temporary price increases.

USPS Follows Ups and FedEx With Holiday Season Peak Surcharges

This temporary price change for the holiday season is similar to “Peak Surcharges” UPS and FedEx have typically implemented for the busy shopping season.

If approved, this appears to be the first time the US Postal Service follows in the footsteps of the courier services to address the higher costs associated with the increase in package volume during this busy time of the year.

Especially this year, there is a strong belief online sales will increase more dramatically over the past years due to the COVID-19 health emergency.

Pending the confirmation by the PRC, most shippers on marketplaces such as eBay and Etsy or third-party shipping platforms that process USPS shipments would be impacted as they typically offer discounted postage included in these adjustments.

This means many micro online sellers with low priced items may see significant increases to their shipping costs as “Free Shipping” is becoming a de facto standard in eCommerce.