U.S. Postal Service to Raise Rates for Package Delivery After Holidays -- Update

(Adds details)

By Kimberly Chin

The U.S. Postal Service said Monday it plans to raise the prices of its shipping services as it struggles financially with a steep decline in mail despite an increase in package deliveries.

The agency will raise the prices of its Priority Mail service by about 3.5% and by 1.2% for Priority Mail Express service. The price changes will be reviewed by the Postal Regulatory Commission. The changes are set to go into effect on Jan. 24.

The price of a small flat-rate box will increase to $8.45 from $8.30, the price of a medium flat-rate box will be raised to $15.50 from $15.05 and the large flat-rate box will be $21.90, up from its current price of $21.10, USPS said. It has also increased the prices of its APO/FPO large flat-rate box, as well as of regular, legal and padded flat-rate envelopes.

While its mailing services are based on the consumer price index, the prices the agency charges to deliver packages for customers such as Amazon.com Inc., which vary by product, are usually adjusted according to market conditions, the agency said.

"The [Postal Service] Governors believe these new rates will keep the Postal Service competitive while providing the agency with needed revenue," it said.

The pandemic has caused a surge in online shopping that is boosting the Postal Service's package business. However, it has been pressured in recent years by mounting costs and a decline in its profitable first-class mail business segment. The pandemic has deepened its financial struggles with first-class and marketing mail volumes declining further.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

November 16, 2020 12:26 ET (17:26 GMT)

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