The USPS has shared its potential price and structural changes for July 2025 with the mailing industry, and there is a lot to unpack and prepare for. There is some good, some bad, and some downright ugly. More information is likely to be shared at the National Postal Forum and, as always, the ultimate decisions on what will be in the USPS-proposed rate case (which should be filed in mid-April, before this article is published) will be made by the USPS Board of Governors.

The Good. Trying to stay positive, let’s start with the good in what the USPS is likely to propose.

The USPS will propose running its Growth Incentive program again for 2026, which presents an opportunity for qualified mailers to earn 30% postage credits based on their volume growth. The USPS is also looking at changes that will improve the program’s administration and hopefully reduce the burden on both the USPS and participating mailers.

The USPS also is looking at running similar promotions to those it is running in 2025, which gives mailers advance notice to make necessary preparations for promotions in 2026. A new promotion is being proposed for Marketing Mail Catalogs at least 12 pages long, bound, and including a list of products/services offered to allow an order to be placed. Qualified pieces can earn a 10% price reduction. It is also rumored that the USPS may propose increases in the incentive amounts for other promotions.

In other changes, the USPS plans to propose extending the Marketing Mail Marriage Mail discount to High Density Plus pieces; offer new discounts for First-Class Mail pallets at SCF; and expanding Marketing Mail weights (currently being reviewed by the PRC but linked to the elimination of Bound Printed Matter).

Also on the “good” list are the fact that the USPS is keeping in place the IMb Full Service and Seamless Acceptance discounts – which it increased last year.

The Bad. Unfortunately, there are some changes the USPS plans to make that will make many mailers unhappy. Included in its proposed structural changes, the USPS plans to eliminate DNDC entry drop ship discounts for Marketing Mail and Periodicals; eliminate Media/Library presort prices; eliminate Marketing Mail automation Basic Carrier Route letter prices; eliminate Bound Printed Matter (already filed at the PRC by the USPS); and eliminate FCM bundles in tubs (new 50 piece minimum for presort rates).

The Future. And hold on to your seat because there are more changes the USPS is considering for January 2026, including elimination of NDC presort rates; introducing zone-based pricing for origin-entered Marketing Mail and Periodicals; simplifying the Periodicals rate structure; and elimination of ADC rates for presort flats in First-Class, Marketing Mail, and Periodicals. The devil may be in the details on some of the January changes, so some may not belong on the “bad” list yet…

The USPS has published the proposed structural changes for July on its PostalPro website (https://postalpro.usps.com/july-2025-release-overview).

The Ugly — Price Increases. Then there is the downright ugly – the price increases themselves. To set the stage and to be fair, let’s start by reminding everyone that the USPS did not raise prices in January 2025, something the industry had asked it to forego, knowing that even though it would mean higher prices in July 2025, at least it would be only one price change in a year vs. two. Industry has pushed hard to go back to only one price change per year because more frequent changes result in a tremendous utilization of resources and money with hardware, software, and process changes twice a year, not to mention contract renegotiations between mail service providers and their customers as well as presenting opportunities for companies to frequently reevaluate their use of the mail because prices are increasing. One price change per year is definitely better for the industry as a whole. That being said, there is no disputing this baby will be ugly…

Exactly how much is available to the USPS to increase prices depends in part on the CPI increases since the last rate change, so the below numbers reflect the CPI through February but not the final CPI, which means some changes can be expected. Included in these numbers are the amounts that are the result of the 2024 incentives and promotions – which are always reflected in the USPS’s available rate authority but are more significant this year due to the Growth Incentive providing postage credits to participants exceeding an estimated $530 million for 2024 mailings.

Overall, the USPS will have around 7.3% rate authority available. The USPS plans to factor Growth Incentive credits into rate authority cap calculations, as well as promotions, which may amount to 0.7% in cap space for First-Class Mail that can be leveraged, and Marketing Mail will be an estimated 4.3%. This could result in up to an eight percent average increase on published prices for First-Class Mail and 11.6% for Marketing Mail. Add another two percent for those products (e.g., Marketing Mail Flats) or mail classes (e.g., Periodicals) that did not cover their costs for FY2024.

Again, some of these numbers could change if the USPS Board of Governors decides not to use all the available rate authority, or if the Postal Regulatory Commission (PRC) should disagree with the data filed by the USPS in its Annual Compliance Report for FY2024 on costs. The latter will be known by the end of March when the PRC issues its Annual Compliance Determination, and the USPS is expected to file proposed rates for July by April 9, 2025.

The Unknown… Of course, there are some big unknowns out there this year that could impact the USPS price and structural changes. Still waiting in the wings is the PRC’s next round of proposed changes to the USPS’s rate system, which could impact the prices the USPS charges in the future. It is unknown when the PRC will act on the proceeding, and it is also unknown what the PRC may propose.

In addition, there have been lots of legislative discussions around the Postal Service, many of which could have significant impacts on how the USPS operates this year and into the future.

Kathleen J. Siviter is Asst. Executive Director of the National Association of Presort Mailers (NAPM) as well President of Postal Consulting Services Inc. (PCSi), and she has over 30 years’ experience in the postal industry. She has worked for the U.S. Postal Service, Association for Postal Commerce (PostCom), and others, as well as providing consulting services to a diverse set of clients with interest in the postal industry. She has also worked with PostalVision 2020, an initiative designed to engage stakeholders in discussions about the future of the American postal system.