USPS Shipping Rates Jump 6.6% In January—With One Exemption

A four-ounce package sent via USPS Ground Advantage will rise 21% from $4.20 to $5.09 starting January 18, 2026, part of broad rate hikes amid the agency’s deepening financial woes. These changes, affecting Priority Mail, Priority Mail Express, and Parcel Select, pressure small businesses, e-commerce operators, and everyday users reliant on postal shipping.

Why Now: The Financial Crisis Behind the Rates

The U.S. Postal Service posted a $9 billion net loss for fiscal year 2025, ending September 30, an improvement from the prior year’s $9.5 billion deficit but with controllable losses expanding to $2.7 billion from $1.8 billion. Operating revenue grew 1.2% to $80.5 billion, fueled by Ground Advantage and prior price adjustments, yet volumes declined sharply: First-Class Mail by 5.0%, Marketing Mail by 1.3%, and Shipping and Packages by 5.7%.

This pattern shows profitable letter services shrinking while lower-margin packages expand, prompting hikes to stabilize finances despite revenue gains.

Ground Advantage Bears the Heaviest Burden

Ground Advantage, offering 2–5 business-day delivery with $100 insurance, averages a 7.8% increase, hitting lighter packages hardest at 12.2% for those under one pound versus 4.4% for 8–20 pounds. A five-ounce Zone 1 parcel jumps 20% from $4.65 to $5.58, structuring rates to favor heavier, shorter-distance shipments.

Priority Mail averages 6.6% higher, with the medium flat-rate box rising from $18.50 to $19.60 and large from $27.10 to $28.70. Priority Mail Express, the overnight option, sees the smallest 5.1% average rise, including flat-rate envelopes from $27.20 to $28.80.

The Commercial vs. Retail Pricing Divide

Commercial rates for businesses using negotiated platforms face steeper hikes than retail counter prices, with Ground Advantage commercial up 9.6% against 5.9% retail—a 3.7-point gap. Weekly shippers of 50 packages could see thousands more in yearly costs.

First-Class Mail stamps hold at 78 cents through mid-2026, postcards at 61 cents, and extra ounces at 29 cents, deferred per Postmaster General David Steiner’s plan after a July 2025 increase.

Strategic Responses and Regulatory Path

The Postal Regulatory Commission will review changes under Docket No. CP2026-2, with approval likely under the Delivering for America plan. Shippers respond by comparing rates with UPS Ground Saver and FedEx Ground Economy, optimizing weights—saving about 50 cents by trimming from five to four ounces—and front-loading shipments before January 18.

USPS’s dual regime caps Market Dominant products like letters via CPI while allowing Competitive package rates to match FedEx, UPS, and Amazon. Network upgrades, including million-square-foot centers, cut transportation costs by $422 million in 2025, though compensation rose $1.7 billion from retirement incentives.

These hikes, the second phase after January 2025, fit a 10-year plan targeting $160 billion via legislation, pricing flexibility, efficiencies, and revenue. USPS remains competitive for rural reaches under its universal service mandate, delivering six days weekly to all addresses, unlike private carriers.

Workforce shortages in areas like Maine, Texas, Kentucky, and Alabama persist, fueling delays despite plans to open last-mile bidding to businesses in 2026 for added revenue.

E-commerce operators must now absorb costs, pass them on, or switch carriers, reshaping last-mile economics and potentially spurring regional alternatives or consolidations. Businesses have weeks to audit volumes and adapt, as USPS commits to pricing as a survival pillar amid structural imbalances.