Postal, Paper & Logistics update: August 2026

As we reported last month, the Postal Service asked the Postal Regulatory Commission for a partial waiver that would have paved the way for the agency to raise Market Dominant prices in January 2027 rather than waiting for the next planned rate-adjustment opportunity in July 2027. The waiver concerned rules governing density rate authority. On Aug. 21, the PRC denied the request.

PMG Steiner expanded on the USPS’s financial predicament when he addressed the Aug. 7 Board of Governors meeting, noting that the agency “can’t rely on areas outside of our control, [so] we have to look at other ways to achieve self-sufficiency if that is the goal. And we are working on those plans. Of course, we have peak season coming up, so we would not take any action until after the New Year,” he told the board, “but if we can’t get agreement on a legislative package this year, our plans would certainly have to entail changes that will impact service like taking a look at our service levels and closing thousands of unprofitable post offices, as well as raising prices.” The PMG’s remarks to the board are published here.

Digging deeper into the higher transportation costs mentioned in the USPS’s third-quarter earnings report, Supply Chain Dive quoted an audit report saying that the agency has been sending more First-Class and Marketing Mail via air rather than using less expensive surface transportation to meet minimum volume requirements under its air cargo contract. Supply Chain Dive identified the carrier as UPS.

“If package volumes continue to trend downward, the Postal Service will likely shift even more First-Class Mail and Marketing Mail into the air network to avoid higher costs even though that is inconsistent with the longer-term goal of reducing reliance on high-cost air transportation,” the OIG’s report [PDF] said.

On Aug. 25, the USPS filed notice with the PRC regarding temporary price increases for some package products for the upcoming holiday season, as detailed here.

The USPS published updated guides for three of its 2027 promotions:

• Tactile, Sensory & Interactive (with new split tiers of 3% and 5%)
• Integrated Technology
• First-Class Mail Advertising

 

 

The guides for the two new 2027 promotions, Impact Messaging and Direct Mail Discovery, are still in progress, the USPS said.

To date, the USPS has not made a formal response to the proposed SEC rule that would make e-delivery of certain disclosures and reports under the federal securities laws the default in some cases.

The USPS suspended mail acceptance to Kiribati on July 24.

The USPS resumed mail acceptance to Eritrea on Aug. 7.

Newsprint supply remains tight with extended order lead times from the mills. Newsprint prices have risen by $110 per metric ton so far this year. North American newsprint producers recently announced another price increase — the third to date in 2026 — of $60 per metric ton, effective with press runs beginning in September.

Sappi and UPM Communication Papers announced plans to combine their graphic-paper businesses in a 50/50 joint venture. The parties have secured financing arrangements for the standalone entity. The deal is expected to generate about €100 million — roughly $115 million — in annual synergies.

The Trump administration’s additional 50% tariff on a broad range of Canadian goods went into effect on Aug. 22. The new tariffs may affect coated groundwood paper (coated #4 and #5 grades) with basis weights exceeding 50 lb. Kruger has proposed a temporary 48.5-pound basis weight as one possible alternative. There are also 50- to 60-pound high-brightness SCA+++ options available. Negotiations between the U.S. and Canada continued through Aug. 21 over an agreement to avoid the tariff but ultimately failed. As of Aug. 27, there was no announced timetable for resuming discussions.

Quad is monitoring the situation closely and is preparing guidance for clients who buy their own paper and may be affected; the Quad team is working proactively to examine options to minimize any impact.

We are closely monitoring market conditions to help protect capacity and minimize disruption as seasonal demand and weather-related events increase.

Very few Quad clients shipping into Canada are impacted by the retaliatory tariffs announced by Canada set to take effect on Sept. 8. The Quad team is communicating with those clients who do have impacted products regarding available options. Quad will continue to monitor this evolving situation and update all clients accordingly.

The Quad team continues to monitor fuel prices, which remain elevated. While August typically brings some seasonal relief as summer travel slows, persistently high crude oil prices are limiting that decline. According to the U.S. Energy Information Administration, the national average on-highway diesel price was $5.652 per gallon for the week of Aug. 24.

Quad is also watching developments surrounding truckload broker liability and insurance following the U.S. Supreme Court’s Montgomery v. Caribe decision in May. The justices ruled unanimously that a broker could be sued under state law because states retain the authority under the Federal Aviation Administration Authorization Act to regulate safety “with respect to motor vehicles.” The Supreme Court’s decision settled conflicting lower-court decisions on whether these claims were preempted by the FAAAA.

The potential for increased liability exposure could lead larger third-party logistics (3PLs) to tighten carrier qualification and insurance standards. If that reduces the use of smaller carriers, it could further constrain available capacity and create upward pressure on truckload pricing. Quad will continue to monitor these developments and communicate any meaningful impacts to our customers.

Global supply chains surrounding raw materials used in ink manufacturing continue to face disruptions, driving up costs and necessitating surcharges.