In 2025, the United States Postal Service (USPS) is set to increase several mailing service fees, potentially causing changes in the delivery times for certain areas. USPS notified the Postal Regulatory Commission on November 15, 2024, and the price adjustments have been approved by the USPS Board of Governors.
The proposed adjustments will take effect on January 19 and include a 3.2% increase in prices for Priority Mail and Priority Mail Express, a 3.9% increase for USPS Ground Advantage, and a 9.2% increase for Parcel Select.
According to a USPS press release, the increase in mailing service fees is based on the Consumer Price Index, while the transportation service fees are primarily based on market changes. These price hikes are part of USPS’s 10-year “Delivering for America” plan to achieve financial sustainability and service excellence.
Among the three major carriers in the United States – United Parcel Service (UPS), FedEx, and USPS – USPS has the lowest mailing fees and is often the preferred choice for sending lighter items and small packages, including delivery to PO boxes and rural areas without additional charges.
The price of First-Class stamps at USPS remains unchanged. A news release in October mentioned that delivery times in some rural areas may increase based on their location, distance, and time.
In a December 11 press release, USPS’s 75th Postmaster General and Chief Executive Officer Louis DeJoy stated during a congressional hearing that when he took office in June 2020, USPS was facing various challenges, nearing a breakdown in both financial and service aspects. The Postal Service had incurred losses of nearly $90 billion, with projected losses of $200 billion over the next decade. Over $20 billion would be needed for repairs in more than 31,000 post offices – where over 57% were behind on paying staff salaries, and over 76% of the 235,000 delivery routes were in deficit.
DeJoy described USPS as a dysfunctional organization with poor operating procedures and discipline, declining products, lack of strategy, vision, and resources, as well as a high resistance to oversight, criticism, and change. External factors contributing to the dilemma included market shifts, inflation, and government policies; for example, in 1999, Americans mailed over 59 billion First-Class letters, but by 2023, the number fell to under 12 billion.
In 2006, Congress passed the Postal Accountability and Enhancement Act (PAEA), mandating USPS to establish an account and prepay employees’ health benefits, with these funds able to reduce the federal government’s deficit. From 2007 to 2016, USPS incurred $62.4 billion in losses, with 87% ($54.8 billion) attributed to pre-funded benefits, resulting in continued annual losses of around $5.5 billion. By 2019, USPS’s total debt reached $160.9 billion.
DeJoy mentioned the Postal Reform Act passed by Congress in 2022, which alleviated the unfair burden of pre-funding, integrating retired employees’ health benefits and medical insurance systems. Over the past three years, “we have initiated reform in almost every aspect of postal service.”
The 10-year “Delivering for America” plan proposed at the end of 2020 aimed to revive the organization from near-collapse, focusing on improving operational accuracy and efficiency, reducing performance costs, among other goals. By “reducing 45 million work hours annually (approximately $250 million) and over $1.5 billion in transportation costs each year to achieve a $30 billion reduction in self-help costs over the next decade,” DeJoy stated that as of September 2023, most service standards had reached a punctuality rate of 93%, while postage rates remained the lowest globally. Revenue growth had exceeded the planned $24 billion.
“We repurposed 200 facilities, allocated $25 billion to deferred maintenance, employed or relocated close to 1 million people, relocated or installed over 1,000 conveyor systems, and revamped the largest air cargo network in the world,” DeJoy said. While completing these tasks, USPS continued delivering to about 167 million addresses nationwide six days a week, mailing approximately 400 million letters, utilizing regulations and processes designed by bureaucratic officials in the 1970s for a different socio-economic landscape of America at that time.
DeJoy emphasized that without significant changes, the service and financial problems could not be remedied. “We are taking proactive steps to further reduce operating costs by $5 billion annually and increase revenue by $3 billion,” he said. “We expect the 10-year losses to reduce from $200 billion to slightly below $80 billion.”
Regarding mail delivery times, DeJoy mentioned that in the coming year, over 50% of mail and packages processed daily would continue to be delivered ahead of schedule, with an expected delivery on the same day as requested for 85% of mail and within one day for 95%, on average Americans would receive mail and packages in 2.7 days. ◇