USPS, UPS 2025 General Rate Increases
Every year, postal and courier companies adjust their rates to reflect inflation and rising operating costs. The year 2025 is no different, as the United States Postal Service and UPS have already announced their General Rate Increases (GRIs) for 2025 to ensure customers are prepared for the upcoming changes in shipping prices.
First, it’s important to understand what a General Rate Increase (GRI) is. Postal and courier companies, including government-owned entities like the USPS, operate as businesses that must at least break even or, ideally, make a profit. As a result, they adjust their rates in response to rising operating costs caused by factors such as inflation, increased demand, or other economic pressures.
Rate adjustments can be either temporary—such as peak season surcharges—or permanent. Permanent rate adjustments include General Rate Increases (GRIs); this term refers to the annual, across-the-board rate adjustment implemented by most postal and courier companies to reflect inflation and rising operating costs. Typically announced in the fall, GRIs go into effect in January, although exceptions can occur.
Rate adjustments are not arbitrary; they’re based on measurable market factors such as fuel costs, average wages, and inflation. For example, as a government agency, the USPS requires its proposed GRIs to go through a formal review and approval process. These rates are first reviewed by the USPS Board of Governors before being submitted to the Postal Regulatory Commission (PRC) for final approval.
In contrast, private carriers such as FedEx and UPS are not subject to the same regulatory oversight for their GRIs. However, they remain constrained by market competition, which prevents excessive rate increases. While the specifics of GRIs vary from carrier to carrier, they typically range from 4 to 6 percent. In some cases, carriers may adjust rates for some of their services while leaving others unchanged.
USPS 2025 General Rate Increase
Under federal law, all USPS products are divided into two categories: market-dominant and competitive. The market-dominant category includes mailing services such as First-Class Mail because the USPS has a legal monopoly on the delivery of “letter mail” (mail weighing less than 13 ounces). The competitive category includes Priority Mail, Priority Mail Express, and commercial package services such as Parcel Select. It’s called competitive because there are private couriers that offer similar services.
Typically, General Rate Increases for market-dominant mailing services are based on the Consumer Price Index (CPI), while GRIs for competitive services are primarily adjusted based on market conditions to ensure the USPS receives the revenue it needs while remaining competitive.
The United States Postal Service has decided not to raise prices for its market-dominant services in 2025, which means the cost of stamps will remain the same. However, the cost of shipping services will increase. Shipping rates will increase approximately 3.2% for Priority Mail and Priority Mail Express, 3.9% for USPS Ground Advantage, and 9.2% for Parcel Select.
USPS General Rate Increases will be effective on Sunday, January 19.
UPS 2025 General Rate Increase
UPS has announced a 5.9% average General Rate Increase to match its main competitor, FedEx. However, actual shipping costs will vary based on shipping service, package weight, shipping zone, and other factors. This means that in many cases the actual increase will be higher than the 5.9% average. For example, heavier packages and further delivery zones will see higher than average rate increases, and 2-day shipping options will see the largest increases.
UPS General Rate Increase for 2025 went into effect on December 23, 2024, just after the peak holiday season and two weeks before FedEx. In addition, UPS will change its large package surcharge calculation on January 27, 2025.