No Surcharge for Holiday Packages, USPS says

With an eye on the 2023 peak season, the United States Postal Service (USPS) yesterday announced it is gearing up for it on multiple fronts. Most notably, it announced there would be no additional surcharges this holiday season.

“There will be no additional fees for residential area delivery, for Saturday delivery, or for minimum volumes,” it said. ‘USPS will continue to be the most affordable way to mail and ship this holiday season.”

Rob Martinez, founder of San Diego-based parcel consultancy Shipware, told Logistics Management that not levying a peak season surcharge signals a turn counter to industry trends going back to 2020.

“We find the pricing announcement somewhat surprising as PMG and CEO Louis DeJoy has previously indicated a desire to raise rates the maximum allowed at every opportunity,” said Martinez. “However, we’ll soon find out if this was a smart play to drive Q4 volumes. Frankly, not only did the announcement come late, but also in my opinion, it was made it too quietly.  The Postal Service keynoted sessions at the Parcel Forum conference in Nashville just this past week, and did not reveal the pricing strategy, missing an enormous opportunity to gain competitive ground with hundreds of the highest volume parcel shippers in the U.S.”

And he added that the agency should have made the announcement in early August (which is when the USPS has historically announced the peak surcharge) as many volume shippers have been busy negotiating discounts to the “demand” charge (formerly called “peak”) with FedEx and UPS. 

“Those shippers have already budgeted demand charges with the private carriers and will now be scrambling to analyze the impact of this announcement,” he said. “Many that might have taken advantage with an earlier announcement are too far down the road with FedEx and UPS to change course now.” 

2022 in review

Looking back at the 2022 peak season, USPS said that it processed more than 11.7 billion mail pieces and packages over the holiday season, taking 2.5 days, on average, to deliver a mail piece or package to its intended destination.

“Our 2022 peak season was a tremendous success,” said Postmaster General and CEO Louis DeJoy in a statement. “We are ready to deliver for the holidays in a superior and routine manner. We have been planning early and leveraging investments in our people, infrastructure, transportation and technology made possible by the Delivering for America plan. And with no holiday surcharges, we are strongly positioned to be America’s most affordable delivery provider this holiday season.”

The USPS cited various investments it has made, in advance of 2023 peak, including: hiring 10,000 seasonal employees; utilizing 348 new package sorting machines; increasing daily processing capacity to approximately 70 million; moving 95% of volume via more reliable ground transportation, for First Class Mail and more than 95% of First-Class packages; and its new USPS Ground Advantage Shipping Service, which it described as a “simple, reliable, and more affordable way to ship packages for the holiday season in two-to-five days across the continental United States,” with USPS adding that this service leverages its last-mile delivery route system and improving mail and postal logistics network.

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