With the holiday season fast approaching, delivery services are preparing for one of the busiest periods of the year, working overtime to get packages and Christmas letters delivered on schedule.
Between food, decorations, travel, and countless other festive expenses, shipping fees are yet another cost added to an already long holiday checklist. And while USPS is often one of the most affordable mailing options, the company has delivered some unwelcome news just as customers prepare for the new year.
In August, the USPS introduced temporary price increases for the 2025 peak holiday season, raising rates by 30 cents to $16, depending on mail type and destination zone. These seasonal rates will take effect on October 5, 2025, and remain in place until January 18, 2026.
A month later, USPS alleviated customer concerns by stating that it would not raise prices for its mailing services in January and would wait until mid-2026 before considering additional changes.
“We continually strive to balance our pricing approach both to meet the revenue needs of the Postal Service and to deliver affordable offerings that reflect market conditions,” said USPS in the announcement.
That promise still holds true for the price of its First-Class Mail stamp, which will remain unchanged. But for nearly all other USPS services, prices will increase.
USPS raises prices again for 2026
The USPS has confirmed it will implement another round of price increases across several shipping services starting January 18, 2026.
USPS 2026 price changes
- Connect Local: +4.9%
- Ground Advantage (Average): +7.8%
- Ground Advantage (Retail): +5.9%
- Ground Advantage (Commercial): +9.6%
- Priority Mail (Average): +6.6%
- Priority Mail (Retail): +6.3%
- Priority Mail (Commercial): +6.9%
- Priority Mail Express(Average): +5.1%
- Priority Mail Express (Retail): +6.3%
- Priority Mail Express (Commercial): +6.9%
- Parcel Select (Average): +6%
- Parcel Select(Delivery unit entry): +5.9%
- Parcel Select (Sectional senter facility entry): +5.9%
Source: USPS
According to USPS, these price adjustments are part of a broader 10-year transformation plan aimed at restoring long-term financial stability while maintaining service quality.
“Although Mailing Services price increases are based on the consumer price index, Shipping Services prices are primarily adjusted according to market conditions. The governors believe these new rates will keep the Postal Service competitive while providing the organization with needed revenue,” said USPS in the announcement.
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Why USPS is raising prices
On the same day that USPS issued its price notice, it also released its financial results for fiscal 2025. Despite a 1.2% increase in operating revenue to $80.5 billion, the company reported a net loss of $9 billion for the year.
USPS partly attributed the loss to surging expenses, including a $1.7 billion increase in compensation and benefits, as well as a $221 million rise in other operating costs.
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“In surveying the results of the past year, the occasional appearance of financial progress – such as our profitable first quarter – is far outweighed by the reality of our significant systemic annual revenue and cost imbalance,” said USPS Postmaster General David Steiner in the earnings release.
“To correct our financial imbalances, we must explore new revenue opportunities and public policy changes to improve our business model. Most importantly, we must operate more efficiently and compete more effectively to best perform our public service mission,” Steiner said.
A declining mail volume trend
Although USPS revenues continue to rise, largely because of rate increases, mail volume is declining steadily across nearly all categories.
USPS 2025 mailing volumes
- First-Class Mail: Revenue +1.5%, Volume -5%
- Marketing Mail: Revenue +2.3%, Volume -1.3%
- Shipping and Packages: Revenue +1%, Volume -5.7%
“The financial results reflect the difficulties of our mandated cost structure and the continued decline in volume, offset to some degree by the Postal Service’s efforts to push back against those trends by aggressively managing the costs we can control and by the judicious use of our pricing authority,” said USPS CFO Luke Grossmann.
And USPS indicates more changes are coming, with plans to create new operational efficiencies and develop fresh product strategies to drive revenue growth.
Why it matters
USPS delivers mail and packages to more than 170 million addresses six to seven days a week, yet it receives no taxpayer funding for its operations. Instead, it relies entirely on revenue from consumers and businesses, leaving price increases as one of the few tools it can use to remain profitable and maintain its nationwide package delivery services.
But USPS is not the only delivery company facing these challenges. Other major carriers are also raising their prices.
Recent price increases from major delivery companies
- UPS: UPS Ground, UPS Air, and International services will rise an average of 5.9% on December 22, 2025.
Source: UPS - FedEx: U.S. domestic and international package services will increase by an average of 5.9% beginning January 5, 2026.
Source: FedEx - DHL: U.S. shipment rates will increase an average of 5.9% starting January 1, 2026.
Source: DHL
Industry experts warn that frequent, large rate hikes could worsen USPS’s financial situation by driving customers away.
“If rate increases proceed at the current frequency and magnitude without critical review, they risk plummeting volume further and exacerbating USPS’s financial challenges,” said NDP Analytics in its 2024 Critique of USPS Elasticities report.
“Rising postal rates have had an impact on volume for sure. It’s not just last year’s postage increases, but a compounding factor of twice-a-year increases over a three-year period,” said Mailers Hub Managing Director Leo Raymond to Printing Impressions. “The Postmaster General denies it — he says it’s just a general decline — but even if that is true, it is being worsened by significant increases that have been imposed on mail.”
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