Transportation costs are rising as fuel prices rise to near record highs

Gas prices in 2026 have risen to near-record levels, driven largely by instability in the Middle East, a key region for global oil production and transportation. War with Iran and tensions in the region have disrupted vital sea lanes that carry much of the world’s oil.

The disruption has driven up oil prices, increased fuel costs around the world and put pressure on industries that rely on transportation.

Major transportation providers, including the US Postal Service (USPS), FedEx, United Parcel Service (UPS), and DHL, are now facing higher operating costs across their air and ground delivery networks.

Fuel is one of the largest variable costs for carriers, typically accounting for 40% of total operating costs, according to Motive. This means that even a small increase in oil prices can have a significant impact on overall transportation costs.

In response, private carriers introduced or increased fuel surcharges, passing part of the burden on to consumers. Shipping prices have risen as a result across the industry in recent months.

USPS, one of the most affordable delivery options, now wants to raise prices, or it could run out of money and stop service.

On March 25, the USPS filed a petition with the Postal Regulatory Commission (PRC), seeking a 8% temporary price increase. The agency says the adjustment is needed to keep prices in line with rising transportation and fuel costs.

“This temporary price adjustment will provide the flexibility needed by the Postal Service by helping to ensure that the true costs of doing business are covered, as required by Congress,” the USPS said in its filing.

If approved, the price increase will take effect on April 26, 2026, and remain in effect until January 17, 2027.

• Priority Mail Express

• Important Mail

• USPS Ground Advantage

• Package Select

The USPS noted that, even with the proposed 8% increase, its rates will remain significantly lower than many of its competitors, as the adjustment represents less than one-third of what other carriers charge on fuel alone.

The USPS emphasized that its competitors have taken action to end the increase in fuel costs.

These pricing strategies are consistent with industry-wide practices, where carriers often adjust surcharges in response to fluctuating fuel costs.

The price request follows a warning from Postmaster General David Steiner, who told Congress in a March 17 written statement that the USPS will run out of money within 12 months unless lawmakers lift a decades-old cap allowing the agency to borrow more money.

“I’m not sure the American public knows that the Postal Service is in dire straits,” Steiner said. “At our current rate and if we continue to pay our required obligations in the same way that we have done in recent years, we will be bankrupt in less than 12 months.”

He pointed to a long-term decline in mail volume as a driver of the revenue loss, saying comparable declines are not sustainable for private carriers.

The latest USPS salary report underscores this concern.

For the first fiscal quarter of 2026:

• Net worth: It was down 1.2% year-on-year

• Manageable income: It was down $618 million to $350 million

• Total loss: It’s up about $1.4 billion

The agency cited volume declines across First Class Mail, Shipping and Packages, and Marketing Mail as the main contributors, partially offset by earlier price increases.

Meanwhile, total operating expenses increased by 4.6%, compared to the same period last year.

“We continue to face difficult financial and business challenges,” Steiner said in the earnings statement. “We are confident that these efforts, when combined with the necessary regulatory, administrative, and legislative changes, can meet the needs of the American public and return the Postal Service to long-term financial stability and strength.”

This is not the first time the USPS has requested a price increase in recent years.

During the 2025 holiday season, the agency implemented a temporary increase from $0.30 to $16, which remains in effect from October 5, 2025, until January 18, 2026.

Although the USPS initially said it would delay further increases until mid-2026, it launched another round of price adjustments in January 2026 as part of its 10-year reform plan aimed at restoring long-term financial stability.

The USPS delivers mail and packages to more than 170 million addresses across the country, six to seven days a week, yet receives no taxpayer money for its work. Instead, it depends entirely on the customer’s income, leaving prices as one of the few tools to manage rising costs.

However, industry analysts warn that frequent or large price increases could reduce mail volume, which could worsen the agency’s financial situation.

“If rate hikes continue at their current frequency and magnitude without critical revisions, they pose a risk of depreciation and increase USPS’s financial challenges,” NDP Analytics said in its 2024 Critique of USPS Elasticities report.

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Mailers Hub Managing Director Leo Raymond expressed similar concerns, citing the cumulative impact of repeated price increases in recent years.

“Increased postage rates have certainly had an impact on revenue. It’s not just an increase in postage from last year, but a compounding factor of two annual increases over a three-year period,” said Raymond to Printing Impressions. “The Postmaster General denies it — he says it’s a general deterioration — but even if that’s true, it’s made worse by the huge increases put into the post office.”

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This story was originally published by TheStreet on March 28, 2026, where it appeared first in the Marketing section. Add TheStreet as a favorite source by clicking here.