The United States Postal Service released new postage and shipping rates this month, increasing costs for popular services such as Priority Mail by up to 51%.
The USPS announced the increases in April 2025 to help achieve financial stability, meet regulatory requirements, and cover the transportation cost of packages.
Rate Changes
The average increase for Priority Mail is 6.3%, but shipping software maker Pirate Ship noted that for some Zone 4-6 shipments, the increase was much higher, i.e., 51%.
The cost of USPS Flat Rate boxes rose by 3%, 11%, and 7% for the small, medium, and large options, respectively.
Ground Advantage rates climbed an average of 7.1%. A new $4 fee on non-standard packages, such as mailing tubes, could add up quickly for businesses selling posters, rods, or other rolled products.
The USPS also lowered some rates. According to Pirate Ship, small 2-3 pound Priority Mail shipments to Zones 1-4 are now about 6.5% less expensive.
Similarly, prices for Priority Mail Cubic shipments within the same zone dropped 10%. And Media Mail rates dropped slightly, by about 2%.
Some additional services, such as insurance, also experienced price decreases.
Thus for small and midsize ecommerce businesses, the rate changes are uneven. Some shipments increased just a few cents. Others, depending on weight and zone, jumped by 30% or more. Still others decreased.
The result is a potential reshuffling of fulfillment costs, product margins, and, perhaps, carrier selections.
Shipping Review
The USPS transports more than 7 billion packages annually — more than UPS and FedEx. The rate changes present an opportunity for sellers to audit shipping and fulfillment practices.
A good first step is to export and analyze past orders. Download the last three months of shipping data and prompt a generative AI platform to organize it by type and zone, for example. The aim is to create a profile that estimates a merchant’s shipping services and regions.
The review should be recurring, as the USPS now adjusts rates every January and July.
Trimming just 25¢ off a per-order shipping cost could have the same bottom-line impact as increasing average order value or decreasing customer acquisition costs.
Once it knows its shipping profile, an ecommerce business can apply the new USPS rates and estimate the cost. The process is as simple as duplicating the existing rate sheet and updating the numbers for a reusable shipping cost model.
Profit Impact
Armed with new costs, sellers can calculate the impact on profit.
For shops that offer free or flat-rate shipping, recalculating profits will be straightforward.
Sellers that pass shipping costs to customers should estimate how the changes could affect conversion rates. And don’t forget to include the cost of return shipping.
Ultimately, merchants can increase prices, adjust free shipping offers or thresholds, create product bundles, or change carriers or service levels for specific shipments.
Third-party tools can help with the analysis. Examples include Pitney Bowes’ PitneyShip software, Pirate Ship, ShipStation, and EasyPost.
Compare policies and packaging, too. Do the new USPS rates, for example, impact dimensional weight enough that it makes sense to adjust box sizes?
USPS Value
Despite the rate changes, the USPS is often the most cost-effective option for ecommerce shippers, especially those with limited volume.
The USPS is vital for last-mile delivery. The UPS and FedEx rely on it, for example.
The USPS is the only option for serving some rural or military customers.
In short, recurring USPS price changes can be frustrating, but they are essential for the future of U.S. ecommerce. The agency loses billions of dollars annually and could cease to exist if it cannot recoup the shortfalls.
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