As tariffs raise prices on toys, tech and other popular gift items higher, the last thing you want to hear is that shipping costs are going up for those who plan to mail gifts this holiday season. But, in a press release last week, the U.S. Postal Service (USPS) announced temporary price changes it plans to implement for the 2025 holiday season.
But, if your first instinct is to opt for FedEx or UPS instead of the USPS for your holiday shipping this year, think again. Both private shipping services have implemented similar holiday surge pricing in past years and are expected to do so again. While UPS has yet to make any announcement, FedEx has already revealed this year's holiday surcharge rates.
That means surcharge pricing is just a fact of life that holiday shoppers and small businesses alike will have to grapple with this year. With stubborn inflation and unpredictable tariffs already squeezing both wallets and profit margins, these annual shipping price hikes might feel like the straw that breaks the camel's back. But there are strategies you can use to ease the squeeze this holiday season. Here's what you need to know.
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The USPS is raising prices for the holiday shipping season
From October 5 through January 18, the USPS will add surcharges to your packages ranging from an extra 30 cents up to $16 on top of your regular shipping costs. Similar temporary price hikes have been used in previous years to help compensate for the increased shipping demand and fund the postal service's long term plans to become more financially stable.
Here are the key details shippers need to know:
- How much is the USPS holiday price hike? Shippers can expect to pay anywhere from 30 cents up to $16 extra (on top of existing fees) depending on the size of the package and how far you're shipping it. You can find the full price list for both retail and commercial shipping on the USPS website.
- When will USPS shipping rates increase? The surge pricing will kick in on October 5 and end on January 18.
- Which shipping services will be impacted by the rate hike? While first class mail won't see the surcharge, you can expect to pay extra on Priority Mail, Priority Mail Express, USPS Ground Advantage and Parcel Select. Priority Mail and Priority Mail express flat rate boxes and envelopes will also get a price bump of between 90 cents and $2.
UPS has yet to announce peak season pricing for 2025, but is expected to do something similar. Meanwhile, FedEx will charge holiday surcharges from September 29 through January 18. Peak season surcharges will range from 40 cents up to $108.50, depending on package size, destination and shipping method. Though, FedEx price hikes will roll out and end in phases throughout that time period.
How holiday shoppers can manage higher shipping costs
With higher prices already straining your holiday shopping budget, news of shipping price hikes can be tough to swallow this year. Fortunately, there are a few creative workarounds you can use to get around the surcharges or at least minimize their impact on your wallet:
- Get your holiday shopping done early. The holiday surcharge doesn't kick in until October 5. So you've got some time to get your gifts ordered (and then shipped) early. Just give your gift recipients a heads up that they should hide those incoming packages in a closet somewhere until the holidays.
- Choose lower-cost, slower shipping speeds if you can't send gifts before the rate increase kicks in. If August or September is too early to start your holiday shopping, you can still keep costs down by getting your shopping done in October or early November. That way, you have enough time left to take advantage of the slower (and lower cost) shipping methods.
- Do your holiday shopping online so you can have gifts shipped directly to the gift recipient's address. Many retailers offer gift wrapping services for an added fee which can end up being cheaper than the cost of wrapping it and shipping it yourself.
- Instead of shipping gifts ahead of visiting family in person for the holidays, use your checked bag to pack gifts. Many airline credit cards offer free checked bags as a perk. But even if you have to pay for a checked bag, that fee may be cheaper than the cost of shipping each of those gifts at the surge rates.
How small businesses can manage the higher shipping costs
Small businesses will feel the squeeze of holiday surcharge pricing even more so than shoppers this year, as it's not always possible to pass the full cost of shipping onto customers. But you also have a few other strategies available to you to manage those costs and minimize their impact on your bottom line this year:
- If you haven't already, call the USPS (as well as FedEX and UPS) to ask about discounts and waivers. These are often volume-based, so if you expect to ship enough to meet those volume requirements, you might qualify for discounted rates.
- Ship through third-party vendors like Stamps.com or Pitney Bowes. These shipping services leverage the high volume shipping they do by virtue of providing shipping services for smaller businesses to offer you discounted rates that you otherwise wouldn't qualify for at your current volume.
- Temporarily switch to lower cost shipping options as your default method. For example, if you normally default to priority mail, consider switching to ground shipping for the holidays. Just make sure you clearly state estimated shipping times to your customers – especially the last possible date to order if a customer wants a gift to arrive before Christmas. For expedited shipping options customers can opt to pay extra for, remember to build the surcharge into the fees.
- Compare shipping rates across multiple providers to find the best value. The best balance of cost and speed will vary by size and destination of your package. So, FedEx might be the better deal for one order while USPS is the best option for another.
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