USPS Wants an 11% Fuel Surcharge on Priority Mail and Packages in January, but No Stamp Increase

The U.S. Postal Service said Thursday it is seeking approval for an 11% price increase on domestic Priority Mail and package deliveries in January to help cover rising fuel costs, and that it does not plan to raise the price of a first-class stamp at the same time, CNBC reported.

The proposal needs approval from the Postal Regulatory Commission. The 11% surcharge would replace a temporary 8% surcharge imposed in April. First-class stamps rose in July from 78 cents to 82 cents; the agency said those would not go up again in January. USPS also said it is proposing to raise overall domestic shipping-service prices 5.9% on average and international delivery prices 7.9% on average. It said transportation expenses in the 12 months ending Sept. 30 rose by $225 million because of higher fuel costs.

The announcement came in a difficult financial stretch. USPS asked Congress on Tuesday for $2 billion in support and reimbursements, warning that it would otherwise have to make significant cuts to retail post offices and other operations. The agency reported an annual loss of $6.5 billion, compared with a $9 billion net loss in the prior 12 months, and has recorded net losses of more than $120 billion since 2007, CNBC reported. The volume of first-class mail, its most profitable product, fell this year to its lowest level since 1965 as more people communicate digitally, even as the Postal Service must still fund nationwide delivery.

Postmaster General David Steiner has said the agency has a broken business model and needs help from lawmakers. The new Democratic-led Congress that takes office in January will decide whether to provide the $2 billion USPS says it is owed for unfunded requirements. Republicans held a series of hearings on Postal Service finances over the past two years, CNBC reported. In May, USPS suspended non-essential spending on travel, office supplies and consultants, CNBC reported, and earlier this year it temporarily suspended employer payments for a federal pension program. The January package surcharge, if approved, would land as the new Congress decides whether to fund the agency and as fuel costs continue to shape shipping rates.