USPS Set To Get Even More Expensive For eCommerce Sellers in 2022 and Beyond

Back on May 5th, 2022 the United States Congress removed some of the financial shackles that had been placed on USPS. This comes right after USPS posted their Q2 financial results which highlighted that whilst revenue was up, mail volumes were down for the institution.

Speaking at the board of governors meeting Postmaster General Louis DeJoy was his usual candid self regarding the state of the USPS finance situation and making it known that higher postal rates would be a necessity in the future.

DeJoy Preparing USPS For A Profitable 10 Year Plan

DeJoy is taking his mission of “Delivering for America” the 10 year USPS plan to self sustainability seriously and whilst the decision from Congress is helpful, DeJoy points out that it will not go far enough to make up the deficit, meaning there will have to be further price increases over the coming years.

“While the impact of the Postal Reform Legislation is helpful — this is approximately a $50 billion dollar offset against a projected $160 billion dollar 10 year loss,”

“While our pricing decisions are ultimately made under the authority of the Board of Governors, in the near term, I will most likely be advocating for these increases…The mailing industry needs to be prepared for continued use of our authority to raise prices on market-dominant products at an uncomfortable rate until such time as we have accomplished our objective of projecting a trajectory that shows us becoming self-sustaining, as required by law,”

“We are ready for our long journey to make both the transactional and structural improvements required to finish what we set out to do … Deliver for America,”

Louis DeJoy, Postmaster General, USPS

Whilst DeJoy makes the point that for years the postal service was being run by a flawed pricing model which has led it to the position it is in, USPS are already starting to lose a lot of ground to both UPS and FedEx. We recently did a comparison post to show how the recent price changes for the postal service had made UPS and FedEx cheaper options for those eCommerce businesses using certain parcel dimensions.

Combine this with the news earlier this week that Amazon were recruiting rural delivery partners to take care of more remote deliveries rather than just using USPS, shows that even more volume could soon be moving away from USPS.

It is all well and good USPS standing by their 10 year “Delivering For America” plan, but if they don’t address the competition, there might not be a lot left for them to deliver in 10 years time.

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