The United States Postal Service (USPS) announced on October 22, 2025, in the Federal Register, its filing of multiple requests with the Postal Regulatory Commission (PRC) to incorporate new negotiated service agreements into the Mail Classification Schedule's Competitive Product List. These agreements cover international shipping options such as Priority Mail Express International (PMEI), Priority Mail International (PMI), First-Class Package International Service (FCPIS), and Commercial ePacket (CeP). Filed between October 14 and 16, 2025, the requests aim to formalize customized contracts that could enhance USPS's position in the competitive international parcel and mail market. This development underscores the agency's strategy to adapt to global e-commerce demands while navigating federal regulatory requirements under Title 39 of the U.S. Code.
Background on USPS Negotiated Service Agreements
Negotiated service agreements represent tailored contracts between the USPS and specific customers, often large-volume shippers, offering discounted rates or specialized terms in exchange for commitments like minimum volume thresholds. These differ from standard postal rates by providing flexibility to compete with private carriers like UPS or FedEx in the international arena. The Competitive Product List, maintained under the Postal Accountability and Enhancement Act of 2006 (PAEA), categorizes services that are not monopolized by USPS and must cover their attributable costs while contributing to institutional expenses.
The filings include four PMEI, PMI, and FCPIS contracts numbered 94 through 97, and one PMEI, PMI, and CeP contract numbered 7. Each was submitted with corresponding docket numbers for PRC review, such as MC2026-20 for the first. As noted in the Federal Register notice, these actions comply with 39 U.S.C. 3642, which governs modifications to the product list, and 3632(b)(3), pertaining to rate changes. The PRC's role is to evaluate whether these agreements meet criteria for competitiveness, non-discrimination, and financial viability, ensuring they do not subsidize or unfairly advantage certain users.
Historically, USPS has expanded its international offerings through such agreements to counter declining domestic mail volumes. For instance, the introduction of Commercial ePacket in 2011 targeted lightweight parcels from countries like China, facilitating e-commerce growth. This latest batch continues that trend, potentially responding to increased cross-border shipping post-pandemic.
Key Players and Regulatory Process
The primary entities involved are the USPS, led by Postmaster General Louis DeJoy, and the PRC, an independent agency established by the PAEA to oversee postal rates and services. Kevin Rayburn, USPS Attorney for Ethics and Legal Compliance, signed the Federal Register notice, highlighting the agency's commitment to transparency.
Upon filing, the PRC assigns docket numbers and invites public comments, as documents are available on its website. The review process typically assesses if the agreements qualify as competitive products, meaning they face market competition and are not covered by the postal monopoly on letter mail. Precedents like the PRC's approval of similar contracts in Docket No. MC2013-1 for inbound competitive services illustrate a pattern of greenlighting expansions that boost revenue without harming competition.
Political forces include congressional oversight through committees like the House Oversight and Accountability Committee, which has scrutinized USPS finances amid debates over universal service obligations. The Biden administration's focus on supply chain resilience could indirectly support these international enhancements, though no direct executive involvement is evident here.
Legal and Policy Implications
From a legal standpoint, these filings must adhere to PAEA requirements that competitive products cover costs and avoid cross-subsidization from monopoly products. Section 3633 of Title 39 mandates that each competitive product covers its attributable costs, with the group contributing an appropriate share to institutional costs—currently set at 5.5 percent by the PRC.
Short-term implications include potential rate adjustments for international shippers, enabling USPS to capture more market share in e-commerce. For example, FCPIS targets small packages under two pounds, appealing to online retailers. Long-term, this could strengthen USPS's financial position, which reported a $6.5 billion net loss in fiscal year 2023, by diversifying revenue streams.
Different perspectives emerge: Consumer advocates might welcome competitive pricing that lowers shipping costs, while private competitors could argue it gives USPS an unfair edge due to its governmental status. The Association for Postal Commerce has previously supported such innovations for fostering efficiency, whereas critics like the Parcel Shippers Association express concerns over market distortion.
Potential Challenges and Debates
Challenges include PRC scrutiny for compliance, with possible rejections if agreements fail cost-coverage tests. Ongoing debates center on USPS's role in a digital age, with calls for reform to address pension obligations and infrastructure investments.
In summary, these filings represent a strategic push by USPS to bolster its international competitiveness. Key takeaways include the expansion of customized contracts and adherence to regulatory frameworks. Looking ahead, the PRC's decisions could shape future postal policies, with potential for increased global partnerships or further legislative adjustments to support e-commerce growth.