The U.S. Postal Service on Thursday said it will permanently raise postage rates next year to cover higher fuel costs.
The USPS will make a temporary 8% surcharge on select postage prices, originally introduced in April, permanent in 2027, and also tack on a 3% price increase. The USPS Board of Governors, which oversees the agency's policies, approved the 11% hike, according to the USPS.
The changes will take effect on Jan. 17, 2027.
"The USPS governors believe these new rates will keep the Postal Service competitive while providing the agency with much needed revenue as it continues to struggle with financial issues," the agency said in a statement.
The agency will reevaluate the surcharge in July 2027 based on fuel prices in the first half of the year.
The USPS also said it would increase domestic shipping service costs by an average of 5.9% for Priority Mail service, Priority Mail Express, USPS Ground Advantage and Parcel Select.
In addition, international rates will rise by an average of 7.9% for Priority Mail Express International, Priority Mail International, First-Class Package International Service and International Priority Airmail.
Like other shipping and delivery companies, the USPS has faced sharply higher costs this year due to soaring diesel prices, which have spiked alongside global oil costs driven up by the war in Iran. The national average price of diesel was $6.10 per gallon on Thursday, up from $3.76 a year ago, according to AAA.
The USPS, which is self-financed, has for years struggled with high costs and dwindling mail volume. The agency on Tuesday reported a $6.5 billion loss for fiscal year 2026, down from a $9 billion loss last year. To stanch the bleeding, the Postal Service has implemented a 10-year plan to reduce expenses and restore profitability.
The U.S. Postal Service was established in 1775, with Benjamin Franklin serving as the first postmaster general. As an independent agency, the Postal Service is run by the USPS Board of Governors, which includes the postmaster general and a deputy postmaster general.
