What are the Rate Changes Coming from USPS and UPS, and How Should We Respond?

As we move through Q2 2025, both USPS and UPS have announced significant rate and fee changes that could affect shipping costs for businesses across the U.S. Whether you’re a high-volume eCommerce seller, distributor, or manufacturer, staying ahead of these updates is essential to protecting your margins and adjusting your logistics strategy accordingly.

At Advanced International Freight, we help companies plan for pricing shifts like these by optimizing shipping profiles, renegotiating contracts, and identifying more efficient fulfillment strategies. Here’s a breakdown of the changes from USPS and UPS, along with recommendations for how to respond.

Proposed USPS Price Increases Go Into Effect July 14th, 2025

The U.S. Postal Service has submitted a rate adjustment proposal to the Postal Regulatory Commission (PRC), scheduled to take effect on July 14, 2025. These increases are part of USPS’s ongoing strategy to offset inflation and modernize its delivery network while addressing long-term financial challenges.

Key Proposed Changes:

• Forever Stamps (First-Class Mail): Increasing from $0.73 to $0.78

• Metered Letters (1 oz): Increasing from $0.69 to $0.74

• Domestic Postcards: Increasing from $0.56 to $0.62

• International Postcards and Letters: Increasing from $1.65 to $1.70

While these changes focus primarily on traditional mail, they reflect an ongoing pattern of rising USPS costs. Parcel rates, which have already seen multiple increases over the last 18 months, are likely to be reviewed again soon—particularly within Priority Mail and First-Class Package Service.

Impact on Businesses:

• Direct mail campaigns and B2C communication costs will rise

• Small eCommerce businesses using USPS for lightweight packages may see margin erosion

• Flat-rate options may offer greater cost stability in response to variable rates

UPS Rate and Fee Adjustments Going Into Effect May 26th, 2025

UPS has announced structural pricing changes that will go into effect on May 26, 2025. These changes are more complex than simple rate increases, and they reflect UPS’s broader shift toward profitability-focused pricing, particularly for large and high-cost deliveries.

Key Adjustments:

1. Fuel Surcharge Changes: Updates to the fuel surcharge tables for UPS® Ground, Ground Saver®, and Air Services. These adjustments reflect fuel price volatility and are expected to increase costs on longer routes and heavy parcels.

2. Additional Handling & Large Package Surcharges: Increases to surcharges for:

   • Packages exceeding size or weight thresholds

   • Non-conveyable or irregularly shaped items

   • Residential deliveries involving oversized items

3. Payment Processing Fee: Introduction of a new 2% processing fee applied to most invoice charges, replacing the former credit card surcharge. This applies regardless of payment method, affecting most UPS business accounts.

   
   

Impact on Businesses:

• Heavy, oversized, and non-standard packaging will become significantly more expensive

• Fuel-related costs may be harder to predict without updated shipping software

• Invoice-based businesses must prepare for new payment processing charges

What Should Businesses Do to Prepare?

With USPS and UPS both implementing cost changes, shippers must take a proactive approach. The days of passively absorbing rate hikes are gone—successful logistics now depend on data-driven decision-making, diversification, and planning.

Recommended Steps:

1. Audit Your Shipping Profile: Review your average package weight, dimensions, destinations, and carrier mix. Identify where surcharges or zone-based pricing are increasing your costs.

2. Revisit Packaging Strategy: Standardize dimensions where possible to avoid dimensional weight penalties and additional handling fees. Lighter, more compact packaging can yield immediate savings.

3. Negotiate with Carriers: Use your shipping data to open discussions with carrier reps. Consider switching service tiers or leveraging volume for better rates and waived surcharges.

4. Consider Multi-Carrier Strategies: Don’t rely solely on USPS or UPS. Explore regional carriers, hybrid delivery solutions, or consolidation with a 3PL to reduce reliance on single-carrier pricing.

5. Forecast for Q3/Q4: Budgeting for Q3 and peak season should now factor in increased USPS mail and UPS parcel costs. Recalculate break-even thresholds and pricing models as needed.

Final Thoughts

The 2025 USPS and UPS rate changes underscore the importance of active logistics management. From new surcharges to rate structure updates, these shifts will impact margins across industries—especially in eCommerce, retail, and high-volume distribution.

At Advanced International Freight, we help clients adapt to cost pressures with customized shipping strategies, carrier negotiations, and smarter last-mile planning. If you’re unsure how these changes will affect your operations, we’re here to help you assess the impact and build a more resilient freight strategy. Contact us today to schedule a consultation.