The US Postal Service (USPS) is preparing to add a fuel surcharge to package deliveries for the first time in its history, responding to soaring diesel prices and long-standing financial challenges.
According to the Wall Street Journal, the temporary 8% surcharge is expected to start in April and phase out by January 2027. The new fee will only affect package shipments and will not apply to letter mail.
According to FoxBusiness, the decision comes as diesel costs have jumped sharply, reaching $5.366 per gallon this week, up more than 43% from last month.
Competitors FedEx and UPS already apply fuel surcharges, which have recently increased amid disruptions to Middle East oil flows caused by the Iran war.
USPS Postmaster General David Steiner warned Congress that without significant changes, the agency could run out of cash in less than a year.
Speaking to a House Oversight subcommittee earlier this month, Steiner called for higher stamp prices, increased borrowing authority, and broad reforms to pension funding, workers' compensation, and retirement investment strategies.
Exclusive: The U.S. Postal Service will impose an 8% surcharge on packages to cover the rising cost of fuel. The surcharge is the first time the USPS has imposed such a fee to cover rising fuel costs. https://t.co/3cJKa7eHkx
— The Wall Street Journal (@WSJ) March 25, 2026
USPS Faces $118 Billion Losses Since 2007
Steiner also outlined potential cost-cutting measures, including reducing deliveries from six days a week to five, closing small post offices in remote areas, or raising first-class mail stamps from 78 cents to $1 or more.
He noted that cutting one delivery day could save about $3 billion annually, while shuttering small post offices could save $840 million, LGMCorp reported.
"These options may not be palatable to Congress or the American public," he acknowledged.
The Postmaster General stressed that the USPS has reached its current $15 billion borrowing limit, preventing additional loans.
"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 said in prepared testimony. "The failure to do this could lead to the end of the Postal Service as we know it now."
Since 2007, the USPS has reported cumulative net losses of $118 billion, with first-class mail volumes dropping to their lowest level since the late 1960s.
Stamp prices have risen 46% since 2019, but Steiner argues they remain far below international postage rates.
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