USPS Will Add a Permanent Weekly Fuel Surcharge Starting January 2027

By Daniel Okafor

The U.S. Postal Service will permanently add a variable fuel surcharge to domestic packages starting in January 2027, shifting rising energy costs onto every shipper who uses its parcel network.

The plan, first reported by Supply Chain Dive, puts USPS in line with FedEx and UPS. Both private carriers raised prices as gasoline and diesel costs climbed, a chain reaction tied to the war in Iran.

Fast Company has reached out to USPS for comment on the decision.

What has happened to fuel prices?

The numbers explain the pressure. Gasoline averaged $4.22 a gallon across the U.S. as of last week, up from $2.98 before the Iran war, according to AP reporting. Diesel crossed the $6-a-gallon threshold last month and now sits at $6.35 a gallon. A year earlier, in February, diesel cost $3.76.

That is a jump of nearly $2.60 a gallon on the fuel that moves most freight. For a carrier that runs one of the largest vehicle fleets in the country, the arithmetic is unforgiving.

What is changing at the post office?

USPS is not new to this fee. In April, it added a flat 8% temporary surcharge that expires on January 17. When it filed that increase, USPS cited FedEx's 25.5% ground fuel surcharge and UPS's 26% increase as reference points, then chose its own fixed 8% fee for 266 days.

The 2027 move works differently. The new fee is variable, meaning it will change week to week, per Supply Chain Dive. The temporary surcharge was a fixed percentage; the permanent one floats with the market.

Which services does the surcharge cover?

The fee applies to packages shipped domestically through four products:

• Ground Advantage
• Priority Mail
• Priority Mail Express
• Parcel Select

That list covers the bulk of USPS's commercial parcel volume. Retail customers and business shippers using those services will both pay it.

How much extra will shippers pay?

The exact amount depends on the week. USPS will calculate the fee weekly, based on fuel prices published on the U.S. Energy Information Administration's website, according to Supply Chain Dive. The agency indexes the surcharge to the price of diesel and jet fuel, both of which have been volatile.

The fee is computed as a percentage of the base postage amount. When fuel prices fall, the percentage drops. When they rise, shippers absorb the difference on every parcel — the same mechanism FedEx and UPS have used for years.

For businesses that ship at volume, a weekly floating percentage makes budgeting harder than a fixed rate. A shipper sending thousands of Ground Advantage parcels a month will see the surcharge line move with energy markets, not with a predictable annual rate change.

How prepared is USPS for the 2026 holiday season?

The surcharge news arrives as USPS positions itself for peak season. "The Postal Service performed very well during last year's holiday season, and we are even better prepared this year for the upcoming peak mailing and shipping season," Postmaster General David Steiner said in a statement. "We have been preparing all year for this peak season, and we have enough capacity to handle whatever comes our way."

The performance data supports the claim. In the 2025 holiday season, mail and packages were delivered in 2.5 days on average, down from 2.8 days during the same period in 2024, which itself was an improvement over the prior year.

The volume is substantial. USPS sees a 40% increase in mail each year between October 1 and December 31.

What does this mean going forward?

Starting in 2027, the gap between USPS and private carriers narrows on pricing structure: all three major parcel players will tie shipping costs to fuel markets. Shippers who chose the post office partly for its predictable flat rates will need to watch the EIA's weekly fuel data the way they already watch the FedEx and UPS surcharge tables.