U.S. Postal Service Plans 'Peak' Surcharges for Domestic Parcels

By Paul Ziobro 

The 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.

Unlike United Parcel Service Inc. and FedEx Corp., the Postal Service hasn't typically added surcharges for parcels it handles during the peak holiday shopping season. The new fees would add to costs for Amazon.com Inc., Target Inc. 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.

Write to Paul Ziobro at [e-mail]

(END) Dow Jones Newswires

August 14, 2020 14:40 ET (18:40 GMT)

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