Postal Service Announces Temporary Price Increase for Christmas Season

August 17, 2020 10:24 AM
View this article online at https://www.fedsmith.com/2020/08/17/postal-service-announces-temporary-price-increase-christmas-season/ and visit FedSmith.com to sign up for free news updates
Commercial shipping boxes in a stack next to a calculator on a wooden surface

The Postal Service said that it has filed notice of a temporary price increase to take effect in the fall.

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

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

The Postal Service said that the price increase is being done “in response to increased expenses and heightened demand for online shopping package volume due to the coronavirus pandemic and expected holiday ecommerce.” The Board of Governors also hopes that the temporary price hike will supply the agency with “much needed revenue.” How much additional revenue the price hike generates would be dependent on how many packages are shipped through the Postal Service in the timeframe that the temporary price hike is in effect.

Indeed, the Postal Service is no stranger to losing money as it has posted over a decade of net losses on its bottom line. The current situation surrounding the coronavirus has only exacerbated the agency’s losses as demand for first class mail has dwindled further. On the upside though, with more people shopping from home, revenue from its Shipping and Packages operation has shot up with the higher volume of packages being shipped. If that trend continues, a temporary price increase in what is already a busy time (the Christmas shopping season) for the Postal Service would likely help to bring in more revenue.

The Postal Service also said in its press release that the price increase is not expected to impact its retail customers. “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,” read the press release.

The agency added that no structural changes are planned as part of the price increase.

What Happens Next?

The Postal Regulatory Commission will review the proposed price increase and if it signs off on it, the temporary price hike will go into effect on October 18 as outlined above.

© 2020 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

Tags:

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

Top