The proposed fees, which still need approval from the Postal Regulatory Commission, come as carriers have been overwhelmed with shipping volume during the coronavirus pandemic.
Photo: Erin Scott/Bloomberg NewsThe U.S. Postal Service plans to add new fees onto commercial packages starting in October as it looks to offset the increased expenses from coronavirus and surge in volume expected from online shoppers during the holidays.
It’s the first time that the Postal Service has implemented surcharges during the holiday season, a spokeswoman said, and follows similar steps that United Parcel Service Inc. UPS 0.91% and FedEx Corp. FDX 2.33% have used in the past to offset costs during the busiest shipping period.
The new fees would add to costs for Amazon.com Inc., Target Corp. TGT 1.28% and other big holiday shippers.
The surcharges on domestic commercial deliveries will run from Oct. 18 through Dec. 27, and will apply to all of its competitive package services. They range from 24 cents a parcel up to $1.50. It won’t apply to retail or international shipments, or regular mail services.
The proposed fees, which still need approval from the Postal Regulatory Commission, come as carriers have been overwhelmed with shipping volume during the coronavirus pandemic. Now they are trying to offset costs and manage capacity with new fees and higher rates.
UPS last week disclosed its own surcharges for peak season shipments that industry consultants said were higher than anticipated. FedEx is also evaluating what fees it will charge shippers ahead of the holidays, according to people familiar with the matter.
Both UPS and rival FedEx Corp. have been charging peak surcharges in recent months, a practice they typically enforce during the year-end holidays. Meanwhile, the Postal Service has come under recent fire from politicians and some customers for delivery delays as its new leader starts to restructure its operations.
The Postal Service, in announcing the proposed fees, said that the limited-time surcharge is “in line with competitive practices without impacting customers at the retail level.”
“In doing so, the Postal Service is protecting the consumer during a vulnerable economic period while increasing prices on commercial volume during heightened volume levels,” the agency wrote.
The surcharges will help the agency raise revenue at a time the Postal Service’s finances strained and it has come under increased scrutiny under new Postmaster General Louis DeJoy, a Republican fundraiser and logistics executive who took the role in June.
The Postal Service lost $2.2 billion in the quarter ended June 30, as a big increase in package shipments wasn’t enough to offset plunges in its more profitable marketing and first-class mail division.
Mr. DeJoy has moved quickly to enact changes to the Postal Service, including limiting overtime hours in some areas that have caused some mail disruption and a reorganization of the agency’s senior leadership.
The Trump administration has been pushing the Postal Service to raise rates, arguing that it charges too little to deliver packages to homes for Amazon and other large shippers.
Higher prices at the Postal Service could also benefit FedEx and UPS as it would give the private carriers leeway to raise their prices more, industry analysts say.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
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