Shipping Group Expresses Concerns Over USPS Price Hike

The Package Shippers Association is urging regulators to examine whether there is sufficient competition for Parcel Select, a delivery service facing an average price hike of 25%.

A parcel delivery industry group is seeking more details about the U.S. Postal Service’s proposed price increases and operational changes impacting key shipping partners.

In a May 22 filing with the Postal Regulatory Commission, the Package Shippers Association requested that the regulator obtain additional data regarding the planned 25% price increase for USPS’ Parcel Select service, set to take effect on July 14.

Representing companies such as Amazon, FedEx, UPS, Pitney Bowes, and DHL eCommerce, the association described the proposed price increases as "unprecedented" and suggested they might indicate a lack of effective marketplace competition. The association emphasized the need for regulators to assess this situation.

Parcel Select, a low-cost ground delivery service used by consolidators like Pitney Bowes and DHL eCommerce, relies on Postal Service facilities for last-mile delivery. In addition to the price hike, the Postal Service is pushing for consolidators to deliver packages to facilities further upstream from their final destinations, a change experts warn could lead to delays and additional costs.

The Package Shippers Association expressed concern that these changes could restrict access to affordable same-day service options, resulting in higher costs for shippers and consumers and reduced service quality.

To evaluate the proposed Parcel Select changes, the association requested the Postal Regulatory Commission to seek the following information:

• Confirmation that USPS is renegotiating agreements to incentivize earlier package entry into its network.

• Details on efforts to inject Parcel Select volume into the network earlier.

• Studies and analyses on the impact of earlier volume entry on shippers’ costs.

• Studies and analyses on whether USPS has enough market power to raise prices or reduce service quality without losing business to competitors.

In a May 24 response, the Postal Service opposed the Package Shippers Association’s request, arguing that the questions are overly broad and beyond the scope of a competitive price change review, which could cause delays and confusion for customers.