USPS cuts loss to $6.5B, adds package fuel surcharge

The news

The US Postal Service narrowed its net loss by $2.5 billion to $6.5 billion in the fiscal year ended Sept 30, as revenue rose 3% to $83 billion, FreightWaves reported. It will also introduce a permanent fuel surcharge on package shipments in January.

Shipping and package revenue rose $1.7 billion, or 5.1%, even as package volume fell 5.3%.
“Our actions alone cannot resolve the challenges brought on by an outdated business model,” said Luke Grossman, the Postal Service’s CFO.

Why it matters: Shippers using Ground Advantage, Priority Mail and Parcel Select will see postage rates adjust weekly with fuel prices, following a model already used by FedEx and UPS.

The details

The new surcharge will vary weekly with fuel prices published by the Energy Information Administration. Ground Advantage and Parcel Select will track diesel prices, while Priority Mail and Priority Mail Express will track jet fuel.

The surcharge will be calculated as a percentage of base postage. USPS will publish rates three to five days before they take effect, per Supply Chain Dive.
Negotiated shipping contracts may carry their own fuel surcharge terms.
FedEx and UPS already adjust their fuel surcharges weekly based on diesel and jet fuel prices.

The smaller loss came largely from a $2.7 billion reduction in retirement and workers’ compensation costs. The controllable loss, which excludes costs outside management’s control, narrowed by $344 million to $2.4 billion.

Total expenses were $85.8 billion, within $200 million of budget. Transportation costs rose $225 million.
The Postal Service is asking Congress to raise its $15 billion borrowing limit.

Mail volumes continued to decline, with First-Class Mail down 5.1% for the year even as revenue rose 1.2%. Volume fell to 42.2 billion pieces in 2025, less than half its 2001 peak, according to Postal Service figures.

Keep US Posted, a group representing newspaper, magazine and greeting card publishers, says USPS has raised prices seven times in five years.
“Excessive price increases and reduced service drive even more mail out of the system,” said Kevin Yoder, the group’s executive director.