Postal Service makes fuel surcharge permanent, raising some postage 11% in January

A fuel surcharge the U.S. Postal Service added this spring as a temporary measure is becoming a permanent part of what Americans pay to mail things.

The agency said Thursday that its Board of Governors approved an 11% increase on select postage prices, effective Jan. 17, 2027. The total combines two pieces: the 8% surcharge first applied in April, which will now stay, and a new 3% price increase on top of it.

The Postal Service did not limit the changes to postage. Shipping prices are going up too, by different amounts:

• Domestic shipping: an average increase of 5.9% for Priority Mail, Priority Mail Express, USPS Ground Advantage and Parcel Select.
• International shipping: an average increase of 7.9% for Priority Mail Express International, Priority Mail International, First-Class Package International Service and International Priority Airmail.

Those shipping figures are averages, so individual prices will move by more or less depending on the service. The steepest headline number in the announcement is the combined 11% on the select postage prices that carry the surcharge, which is larger than the average increase for either group of shipping services.

Fuel is the reason the agency gives. Diesel prices have climbed sharply this year along with global oil prices, which rose because of the war in Iran. AAA put the national average for diesel at $6.10 a gallon on Thursday, compared with $3.76 a year earlier, an increase of about 62%. A delivery network that runs on trucks and vans has little room to absorb that, and other shipping and delivery companies have faced the same cost pressure.

"The USPS governors believe these new rates will keep the Postal Service competitive while providing the agency with much needed revenue as it continues to struggle with financial issues," the agency said in a statement.

That statement describes two goals that pull against each other. Raising prices brings in money, but every increase also gives businesses that ship large volumes a reason to compare rates with private carriers. Those carriers are dealing with the same fuel bills, though, which may explain why the Postal Service believes it can raise prices without losing much ground. The more exposed customers are households and small businesses that mail things regularly and have few practical alternatives for letters.

The most unusual part of the plan is its built-in review. Even after making the surcharge permanent, the Postal Service said it will reevaluate the charge in July 2027, based on fuel prices during the first half of that year.

That arrangement seems sensible, but the label is confusing. A surcharge tied to fuel prices and scheduled for review is permanent only until the agency decides otherwise. Customers should treat it as the current price. They should not assume it will hold indefinitely or disappear if diesel prices fall. The agency has not said what fuel price would lead it to lower or remove the charge, and without that benchmark, it is hard to judge whether the July review will lead to any change.

Folding a temporary charge into permanent prices is also a familiar pattern in pricing. Once revenue has been counted in the budget for a year, removing it becomes harder. For an organization with the Postal Service's finances, giving that money back would be especially difficult.

The Postal Service pays for its operations mainly through postage and service sales rather than tax money. For years, rising costs and falling mail volume have strained that model. On Tuesday, the agency reported a $6.5 billion loss for fiscal 2026, smaller than the $9 billion it lost the year before.

A loss that shrinks by $2.5 billion in one year is real progress, but the agency is still deeply in the red. It is following a 10-year plan meant to cut expenses and return to profitability, and the new prices fit that plan. Higher prices on a shrinking volume of mail can bring in more revenue for a while, but they do not fix the underlying decline in mail. That decline is the main reason the agency keeps returning to rate increases.

The Postal Service is run by its Board of Governors, which includes the postmaster general and a deputy postmaster general. The board sets the agency's policies and approved this increase. The institution dates to 1775, when Benjamin Franklin became the first postmaster general.

For now, the date that matters is Jan. 17. Anyone planning bulk mailings or regular shipments has about two months to budget for the new prices. The next milestone is the July 2027 review, which will show whether the surcharge depends on diesel prices or has simply become part of the base rate.