The United States Postal Service (USPS) is moving to impose a fuel surcharge on package deliveries for the first time in its history, marking a significant shift for an agency long defined by flat-rate pricing.
In a notice dated March 25, 2026, USPS said it is seeking approval to introduce a temporary 8% surcharge on package and express mail services, citing rising transportation costs driven by higher oil prices linked to the Iran war.
The surcharge, if approved, would take effect on April 26 and remain in place until January 17, 2027. It would apply to Priority Mail Express, Priority Mail, USPS Ground Advantage and Parcel Select, but would not affect first-class letters or stamp prices.
“The U.S. Postal Service filed notice today with the Postal Regulatory Commission (PRC) regarding a time-limited price change to better align its costs of transportation with the market. This temporary price adjustment will provide needed flexibility for the Postal Service by helping to ensure that the actual costs of doing business are covered, as required by Congress,” the Postal Service said.
USPS breaks from decades of pricing policy
The move represents a departure from USPS’s longstanding approach of avoiding surcharges, even as private carriers such as FedEx and UPS have relied on them for years.
USPS acknowledged that its competitors have already increased their own fuel surcharges in response to rising oil prices, adding that its proposed charge would remain significantly lower.
“Transportation costs have been increasing, and our competitors have reacted with a number of surcharges. We have steadfastly avoided surcharges and this charge is less than one-third of what our competitors charge for fuel alone, so even with this change, the Postal Service continues to offer great value in shipping with some of the lowest rates in the industrialized world.”
The pricing shift comes after oil prices surged more than 40% following the escalation of conflict involving Iran, which disrupted flows through the key Strait of Hormuz global energy corridor.
Diesel prices in the U.S. have risen sharply in recent weeks, significantly increasing transportation costs for delivery networks that rely heavily on ground logistics.
Although oil prices this week showed signs of easing amid reports of a possible U.S.-Iran framework and limited reopening of shipping routes, markets remain volatile, with supply disruptions still affecting global trade flows.
Cost-cutting options under review
The surcharge proposal comes as USPS faces mounting financial challenges, with Postmaster General David Steiner earlier this month warning that the agency could run out of cash within a year without major reforms.
“In order to survive beyond the next year, we need to increase our borrowing capacity so that we don’t run out of cash,” Steiner told lawmakers in a March 17 prepared testimony before Congress.
“The failure to do this could lead to the end of the Postal Service as we know it now.”
USPS has already reached its $15 billion borrowing limit and has reported cumulative losses of $118 billion since 2007, as first-class mail volumes — historically its most profitable segment — continue to decline.
Stamp prices have risen significantly over recent years, increasing from 50 cents in 2019 to 78 cents currently, with proposals under consideration to push prices to $1 or higher.
The Kenya Times has reached out to the Postal Regulatory Commission for comment on the Postal Service’s request to introduce the surcharge but had not received a response at the time of publication.
In addition to price increases, USPS leadership has outlined a series of potential cost-cutting measures, including reducing delivery days from six to five per week and closing smaller post offices.
Steiner said such changes could save billions annually but acknowledged they may face political resistance.
The agency currently serves more than 170 million addresses nationwide, making operational changes complex and potentially unpopular.
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