USPS will not institute a surcharge this holiday season after slashing its need for temporary workers
Postal Service predicts "competitive advantage" over private shippers who will charge customers more during the holidays
The U.S. Postal Service, fresh off several consecutive significant price hikes, will not include a surcharge this peak season for mailers and shippers sending items during the holidays.
The announcement marks a departure from recent USPS strategy, which has increased its prices between early October and mid-January for the last few years. Postal management pointed to its need to hire fewer temporary workers as the cause for the change and said the lack of a fee increase would give the mailing agency a competitive advantage over private shippers this year. USPS will bring on just 10,000 seasonal staff this year, down from 20,000 in 2022 and 45,000 in 2021.
Postmaster General Louis DeJoy said the smaller temporary hiring and the decision to keep prices flat were made possible by USPS converting nearly 150,000 employees to full-time, career roles, which brought “both stability and energy from our workforce to succeed in our mission.”
“We are ready to handle any peak season volume in a superior and routine manner,” DeJoy said. “That is why we will not be adding any additional surcharges for our customers this peak period. We will continue to be the most affordable way to mail and ship during the holiday season.”
In July, the Postal Service permanently increased its price for First-Class mail, marketing mail and packages by 5.4%. That followed additional higher-than-inflation increases in July 2022 and January 2023. The Postal Regulatory Commission allowed for the larger hikes in 2020 and DeJoy has tapped into the authority on nearly every allowable occasion, calling them a key part of his plan to allow USPS to find firmer financial footing. Large-scale mailers have expressed concern DeJoy is gearing up to announce another significant price increase in the coming weeks.
Jacqueline Krage Strako, USPS’ chief commerce and business solutions officer, said it was only fair to pass along the agency’s savings resulting from fewer hires to its customers.
“If we're not going to incur an expense and increase a hyper expense like we have in the past peak season, we had the opportunity to make sure that we were not charging [the surcharge,” Strako said.
She added competitors, such as UPS and FedEx, have already announced they will add surcharges this holiday season.
“Do we expect this to also grow volume? Absolutely,” Strako said. “This is a competitive advantage.”
Joshua Colin, USPS’ chief retail and delivery officer, said the agency has added 100 package sorting machines since last holiday season and 348 since 2021. It has grown its daily package processing capacity by 17% since last year, he added.
USPS saw an 11% dip in mail and package volume during its busy holiday season in 2022 compared to the previous year, but it successfully made its deliveries more quickly. It also saw its operating revenue tick up, in part due to the higher prices. The agency faced a crisis in the 2020 holiday season when package volume soared by 40% and the high demand, paired with employee shortages exacerbated by the COVID-19 pandemic, led to unprecedented delivery delays. Since that time, however, the agency has operated much more smoothly during its busiest time of the year.
DeJoy declined to say the updates would lead to more business.
“That would be a prediction I do not want to make,” DeJoy said. “But I pray for it.”