On July 1, 2025, the U.S. Postal Service rolls out Phase 2 of its network realignment, widening delivery-time “bands” for First-Class Mail and USPS Ground Advantage. Less than two weeks later—July 13—new postage rates kick in, driving up the cost of most parcel products by 6-8%.
For brands, that midsummer one-two punch can shift promised ship dates, squeeze margins, and influence channel-mix decisions. For 3PLs, it forces new cut-off times, WMS changes, and pricing conversations—right in the heart of peak-season planning. It is likely to make USPS unfavorable in more weight classes and zones compared to alternative ground solutions.
The service refinements represent a continued effort by the USPS to modernize operations amid ongoing financial challenges. USPS has faced financial difficulties recently and introduced its “Delivering For America” plan—a 10-year initiative designed to restore the Postal Service’s financial sustainability and maintain reliable service to its 169 million delivery addresses across the country—in 2021. In the fiscal year ending September 2024, it reported a $9.5 billion loss, up from a $6.5 billion net loss in 2023.
USPS Service Standards & Price Changes: What’s changing on 1 July, 2025
- More ZIPs qualify for 2–4-day service in both First-Class Mail and Ground Advantage.
- Earlier trailer dispatch times at Regional Processing & Distribution Centers (RPDCs) mean late loads roll into next-day sort. It means late-arriving trailers will miss same-day processing; 3PLs and shippers must move dock cut-offs earlier.
- Local “turnaround” radius grows, pushing many origin-and-destination-within-one-RPDC parcels into a faster standard.
- Sundays and holidays no longer add cushion—a Saturday entry no longer gets a free day. In other words, Saturday drop-offs lose their “free day” cushion; adjust transit-time calculators.
USPS expects this refinement to cut $36 billion in costs over 10 years.
USPS Service Standards & Price Changes: Price Highlights (Effective July 13)
- USPS Ground Advantage: average +7.1 %
- Priority Mail / Priority Mail Express: about +6 % across weight–zone cells
Newsweek notes that the rate filing is part of USPS’s quest to save $36 billion over 10 years and restore long-term solvency.
- Forever stamp: 73 ¢ ➜ 78 ¢ (≈ +7.4 %)
What UPS, FedEx, Amazon Logistics, and OnTrac Are Doing in 2025?
UPS
- Fuel-surcharge update: New tables took effect 23 June 2025, raising the index by 100 basis points for Ground and Air.
- SurePost price jump: Base rates for lightweight parcels (1-9 lb) climb about 10 % starting 13 Jan 2025, with Delivery-Area Surcharges up 60 %+.
- Strategic angle: Lightweight e-commerce is now pricier, narrowing the historic cost gap with USPS after the Postal Service’s 13 July hike.
FedEx
- General Rate Increase: Standard list rates rise an average 5.9 % on 6 Jan 2025 across Express, Ground, and Freight.
- Higher surcharges: Additional-handling and oversize fees escalate in the 2025 surcharge schedule.
- Strategic angle: Peak and oversized surcharges stay in place through July; heavier items may still favor FedEx versus USPS’s tighter DIM rules.
A viable option for Zones 4-6 where UPS/FedEx surcharges bite, though network density is still ramping.
Amazon Logistics (AMZL)
- Rural build-out: Amazon is investing $4 billion to extend same- and next-day service to 4,000 smaller towns and rural communities by the end of 2025.
- Insourcing volume: Continued pullback from UPS as Amazon handles more Prime orders in-house.
- Strategic angle: Jay Group now offers Amazon Shipping as part of its multi-carrier mix. Parcels are directly picked up from our warehouses and delivered nationwide, even for orders that never touched Amazon.com. The service delivers Prime-like speed and has been extremely competitive versus USPS and traditional ground carriers, giving brands a cost-effective buffer against July’s USPS rate hike, especially in rural ZIP codes.
OnTrac (LaserShip)
- Network expansion: Backed by a late-2024 financing round, the merged LaserShip–OnTrac network now connects both coasts and reaches roughly 80 percent of U.S. households within three days.
- Competitive pricing: Parcel rates undercut national integrators on many Zone 4–6 shipments, with no Saturday-delivery surcharge.
- Strategic angle: A strong option for mid-zone e-commerce where UPS and FedEx surcharges bite; network density is still ramping, so coverage should be confirmed lane by lane.
According to the 2024 Pitney Bowes Parcel Shipping Index (link), U.S. parcel volume climbed to 22.37 billion shipments, a 3.4 % increase over 2023’s 21.65 billion. The index projects total volume will reach 30 billion by 2030.
The report also forecasts a changing carrier hierarchy: by 2028, Amazon Logistics is expected to edge past USPS, handling 8.4 billion parcels versus USPS’s 8.3 billion. Amazon is already closing the gap—processing 6.3 billion parcels in 2024, just shy of USPS’s 6.9 billion.
Meanwhile, the “Other” carriers segment—smaller regional and niche players—grew 22.6 % year over year, highlighting a long-term shift in last-mile economics toward lighter parcels and lower-cost delivery options.
Take-away for Brands & 3PLs
With UPS, FedEx, and USPS—and most regionals—raising rates 5-10% in 2025 while Amazon Shipping and OnTrac keep expanding, the cheapest label shifts from package to package. USPS still wins on many sub-1-lb shipments after July’s changes, but its edge fades fast as weight climbs. Today’s smartest strategy is a data-backed, multi-carrier mix:
- Test labels in real time at checkout to surface the best option for each order.
- Leverage regionals for mid-distance zones where they beat national surcharges.
- Zone-skip to carrier partners when palletizing volume can trim both miles and dollars.
In short, the “ideal” carrier combo now swings on zone, weight, and fee structure—making a flexible, analytics-driven 3PL partnership more valuable than ever.
USPS’s expanded service standards take effect on 1 July, but most shippers—and their 3PL partners—will need time to update transit-time tables and adjust trailer cut-off times. Until that recalibration is complete, parcels generated by Prime Day (8–11 July) and concurrent sales on Walmart, Target, and other platforms are unlikely to arrive any sooner and may even be delayed by a day if the new deadlines are missed. Just two days later, on 13 July, USPS will raise parcel rates by roughly 6–8 percent, increasing the cost of every outbound shipment—and of the inevitable surge of returns that follows these mid-July promotions.
Over the long run, brands are best served by a 3PL with a diversified carrier portfolio that can rate-shop across cost, service level, and customer expectations. At Jay Group, we’re constantly innovating—evaluating new carrier partners, service tiers, and pricing structures. Our investment in next-generation TMS and OMS solutions lets us orchestrate that carrier mix in real time, giving our customers a truly best-in-class shipping experience.