The path forward for a potential USPS postage increase in early 2026 is anything but straightforward. Here’s what you need to know:
The Forecast: The USPS expects to have about a 1.2% rate authority available for a January price change. We’ll know the final number after the August CPI data is released on September 11.
The Curveball: The Postal Regulatory Commission (PRC) has introduced new proposals that could significantly impact the timing and size of any rate change. The PRC is proposing to limit rate adjustments to just once per year for the next five years.
A change to once a year would be a welcome one in the Industry, the twice yearly has impactive cumulative effects.
The Structural Changes: The PRC also recently approved three of four key structural changes proposed by the USPS, but they did not approve the complex plan for a new zone-based pricing structure. The PRC informed the USPS that a resolution isn’t likely by early October, the deadline for a January filing.
The industry now faces a lot of uncertainty. Will the USPS file for a small, structural-only change in January and save the main rate increase for July? Or will they wait and file for everything at once?
This is a critical time for businesses that rely on mail. Understanding these factors is key to planning for the year ahead.
Make sure you have partners in your supply chain to help you navigate these changes.
What We Know
-
- At a July Mailers Technical Advisory Committee (MTAC) meeting, the USPS Vice President of Pricing and Costing, Sharon Owens, shared a bar graph of forecasted postage figures for 2026 and 2027.
- These figures are USPS estimates based on Global Insights forecasts and current regulations.
- Current regulations tie the USPS’s rate authority for a January increase to the CPI-U using a 12-month moving average.
- The USPS expects to have 1.2% in available rate authority for a January price change, based on forecasted CPI-U.
- The current available CPI-U rate authority, based on a rolling average of the last five months, is 1.031%.
- The final month of CPI data the USPS could use for a January price change is August, which will be released on September 11, 2025.
- If the USPS proceeds with a January increase, they will need to file before the September CPI is released, which is October 15, 2025. A filing would likely be expected in the first half of October.
What We Don’t Know
-
- The full impact of recent Postal Regulatory Commission (PRC) rulings and open dockets on the USPS’s ability or intent to proceed with a January price change is unknown.
- The PRC initiated a five-year review of the ratemaking process in April 2024. As part of this review, Order No. 8993 proposes two changes:
-
- Limiting Market Dominant rate adjustments to no more than once per year for the next five years (from October 1, 2025, to October 1, 2030). This could allow additional changes only if they are a rate reduction or rate-neutral.
- Restricting the USPS from setting workshare discounts farther away from their avoided costs.
-
- On June 11, 2025, the USPS filed proposals to modify product descriptions for First-Class Mail, USPS Marketing Mail, and Periodicals. These changes need approval to be included in a January rate change.
- On August 15, 2025, the PRC approved three of the four USPS proposals but did not approve the proposal for a new zone-based pricing structure for origin-entered mail, stating that the issues were “complex” and could not be resolved on the requested timeline. The PRC has stated they do not believe a resolution will be reached by early October, which would align with a January 2026 filing.
What We Think We Know
-
- The PRC’s Order No. 8993, which proposes limiting rate changes to once per year, has not yet been enacted as a final rule but could be by October 1, 2025.
- If the PRC does not enact the final rule, the USPS has two options:
-
- Implement a January 2026 price change of approximately 1.2%, excluding the zone pricing change.
- Present two filing options to the PRC: one that excludes the zone pricing change and one that includes all proposals in the hope that zone pricing is approved by December for January implementation.
-
- If the PRC does enact the final rule limiting rate changes to once per year, the USPS has two options:
-
- File a rate change in January 2026 that implements structural changes but does not constitute a rate increase, leaving the CPI and other rate authorities for a July 2026 filing of approximately 5%. They could again present a filing with and without the zone pricing change.
- Not file a rate change in January and wait until July to implement all structural changes along with the CPI and other factors for an estimated 5% increase
-
For more details regarding USPS and PRC references download our full paper.
