The Post Office Makes Its Fuel Surcharge Permanent: What an 11% Charge Means for Your Holiday Packages and Small Business

If you plan to ship Christmas presents to the grandchildren or run a small business out of your spare bedroom, the U.S. Postal Service just made 2027 a little more expensive. The Postal Service said Thursday it will turn the temporary 8% fuel surcharge it added to packages in April into a permanent charge and stack another 3% on top, for an 11% total that is set to begin January 17, CBS News reported ^[1].

The Epoch Times reported that the Postal Service filed a notice of the change Thursday with the Postal Regulatory Commission, the independent agency that reviews postal prices, and that the new rates would take effect January 17 if approved ^[2]. The Postal Service plans to look at the surcharge again in July 2027, based on what fuel costs in the first half of the year ^[1][2].

Here is what changes, why it is happening, and what it means for your wallet.

What You Will Pay

The increase hits the Postal Service's package products, not the stamp on your Christmas cards. Domestic prices for Priority Mail, Priority Mail Express, USPS Ground Advantage and Parcel Select will rise an average of 5.9%, while international package services, including Priority Mail International and Priority Mail Express International, will rise an average of 7.9%, according to CBS News ^[1].

First-class stamps are not part of this round, The Epoch Times reported ^[2]. That paper noted that a first-class stamp already went from 78 cents to 82 cents in July ^[2].

There is also a holiday wrinkle. A separate peak-season increase on the same package services took effect in October and runs until mid-January, The Epoch Times reported ^[2]. The trade site Value Added Resource, which tracks shipping costs for online sellers, noted that the temporary 8% charge and the holiday increases are both scheduled to end January 17, the same day the new permanent surcharge begins ^[4]. In other words, there is no break in between.

Why the Post Office Says It Needs the Money

The short answer is fuel. CBS News, citing AAA, reported that the national average price of diesel was $6.10 a gallon on Thursday, up from $3.76 a year earlier, and tied the jump to global oil prices driven up by the war with Iran ^[1]. The Epoch Times reported that diesel topped $6.50 a gallon for the first time this year amid supply disruptions linked to the wars in Iran and Ukraine ^[2].

The Postal Service told regulators its transportation expenses rose $225 million in the fiscal year that ended September 30, according to The Epoch Times ^[2].

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The bigger picture is a balance sheet that has been in the red for years. The Postal Service reported a $6.5 billion loss for fiscal 2026 on Tuesday, down from $9 billion the year before, CBS News reported ^[1]. The Epoch Times reported that the agency also posted a $9.5 billion loss in fiscal 2024 and asked Congress this week for $2 billion, with Postmaster General and CEO David Steiner warning of significant cuts if lawmakers do not act ^[2]. The smaller loss this year came mainly from higher revenue and lower workers' compensation costs, even as fuel costs climbed, according to The Epoch Times ^[2].

Mr. Steiner has been blunt about the agency's finances. The Epoch Times reported that he told lawmakers in March that the Postal Service could run out of money by October or November if it kept making retirement payments, and listed options including higher stamp prices, five-day delivery and closing some post offices ^[2].

In its statement, the Postal Service's Board of Governors argued the new prices would keep the agency competitive ^[1]. "The USPS governors believe these new rates will keep the Postal Service competitive," the statement said, as quoted by CBS News ^[1].

How It Compares With UPS and FedEx

The Postal Service is not the only shipper charging for fuel, and it is still the cheaper option on that front. When the temporary surcharge was announced in March, FreightWaves reported that UPS and FedEx fuel surcharges ran roughly 21% to 34% of base transportation rates, depending on the service ^[5]. Supply Chain Dive reported that the Postal Service said in March that its charge was less than a third of what competitors charge for fuel alone ^[3].

That March announcement, FreightWaves reported, came after gasoline and diesel prices jumped more than 30% in the weeks after the war began, with gasoline for the Postal Service's delivery vans rising about $1 to nearly $4 a gallon ^[5]. At the time, the Postal Service described the 8% charge as a time-limited step that would help it move toward a permanent fuel mechanism for its package products ^[5].

A Weekly Fuel Fee Is Still Coming

There is more change on the way. In late October, the Postal Service posted guidance saying it would begin a fuel surcharge in January that updates every week based on diesel and jet fuel prices published by the federal Energy Information Administration, the same way FedEx and UPS do it, Supply Chain Dive reported ^[3]. The new percentage would be published three to five days ahead for diesel-based shipments and three to four days ahead for jet fuel, according to that report ^[3].

Value Added Resource reported that the Postal Service took that guidance down from its PostalPro website two days after posting it, without explanation ^[4]. After Thursday's announcement, the site reported that the surcharge will start as a fixed 11%, although the Postal Service still intends to adjust it weekly, with no date yet for that step ^[4]. Under the earlier guidance, Ground Advantage and Parcel Select would be tied to diesel prices and Priority Mail products to jet fuel ^[4].

What It Means for Small Sellers

For families who mail a few boxes a year, the change will be noticeable but manageable. For the home-based sellers who ship on eBay, Etsy and similar sites, it adds to an already confusing year. Value Added Resource counted a string of 2026 rate changes, including a September increase of up to $2.28 on some Ground Advantage rates and up to $4.35 on some Priority Mail rates, temporary holiday increases starting in October and new zone-style pricing groups for Ground Advantage ^[4].

The site also warned that packages carrying an outdated surcharge amount can be hit with postage due, and that higher shipping charges can raise the fees some online marketplaces collect when those fees are figured on the total a buyer pays ^[4]. Sellers who print labels through online services should check that their software is updated in January.

There is a case that the price increase is working for the agency. Supply Chain Dive reported that the temporary 8% charge helped lift package revenue 7.7% from a year earlier in the third quarter, even as volume fell 3.4% ^[3]. Value Added Resource reported a $2.5 billion net loss in that quarter and about $5.7 billion for the first nine months of the fiscal year ^[4].

The Bottom Line

The Postal Service is constitutionally rooted, self-funded and still bleeding money, and it is passing a war-driven fuel bill on to the people who use it. That is a fairer approach than a taxpayer bailout, but it puts the burden on rural families, seniors and small businesses who rely on the mail more than most. With fuel prices still high and the agency asking Congress for help, the July review will be the next test of whether the 11% sticks. Until then, the cheapest move for holiday shoppers is the old one: ship early, compare carriers and keep the stamps for the Christmas cards.