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US Postal Service wants 25% price hike for high-volume package shipping

Published 05/10/2024, 06:27 PM
Updated 05/10/2024, 06:30 PM
© Reuters. FILE PHOTO: A employee works as the largest United States Postal Service (USPS) facility gears up for the busiest shipping time of the year, in Los Angeles, California, U.S. November 30, 2023. REUTERS/Jorge Garcia/File Photo

By David Shepardson

WASHINGTON (Reuters) - The U.S. Postal Service on Friday said it is seeking an average 25% price hike for high-volume shippers to enter packages for regional delivery through its Parcel Select service.

The price hike, which would take effect on July 14 and must be approved by the Postal Regulatory Commission, is because USPS no longer intends give incentives for parties to aggregate mail volume from multiple shippers and bring such volume directly to the destination delivery unit.

USPS is not proposing to hike prices for its USPS Ground Advantage package shipping.

Last month, USPS said it plans to raise the price of first-class mail stamps to 73 cents from 68 cents effective July 14. The hike, which must be approved by the postal commission, would raise mailing services product prices by 7.8%.

Stamp prices are up 36% since early 2019.

USPS in November reported a $6.5 billion net loss for the 12 months ending Sept. 30 as first-class mail fell to the lowest volume since 1968. USPS on Thursday reported a second quarter net loss of $1.5 billion.

On Wednesday, a bipartisan group of 26 U.S. senators urged USPS to pause planned further consolidation to its processing and delivery network, warning it could slow mail deliveries.

USPS has been aggressively hiking stamp prices and is in the middle of a 10-year restructuring plan designed to cut $160 billion in forecasted red ink.

On Thursday, U.S. Postmaster Louis DeJoy said "this massive and complex evolution includes correcting for decades of haphazard decision making and neglect to our physical infrastructure network."

He added USPS knows it must make improvements "within the time limits we have for survival."

© Reuters. FILE PHOTO: A employee works as the largest United States Postal Service (USPS) facility gears up for the busiest shipping time of the year, in Los Angeles, California, U.S. November 30, 2023. REUTERS/Jorge Garcia/File Photo

USPS has been raising stamp prices twice yearly and has said it expects its "new pricing policy to generate $44 billion in additional revenue" by 2031.

In April 2022, President Joe Biden signed legislation providing USPS with about $50 billion in financial relief over a decade.

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