A technical oversight on third-party shipping platforms led to merchant overcharges and potential lost business for the U.S. Postal Service. As competitive pressure mounts in last-mile delivery, the incident reveals hidden vulnerabilities in carrier-integrator partnerships.
Software Miscalculations Led to Overcharges
An audit by the U.S. Postal Service’s Office of Inspector General (OIG) has uncovered that several multi-carrier shipping platforms misrepresented USPS rates between November 2023 and January 2025, leading to both overcharges for merchants and lost revenue for the Postal Service. The platforms, used by small and midsize e-commerce sellers to access discounted rates via the USPS Merchant Rate Card program, sometimes applied higher-than-authorized postage due to software errors.
One of the primary issues was incorrect rounding of package weights, which caused merchants to be charged more than necessary. The OIG noted that this could have prompted sellers to shift to competitors like UPS or FedEx, eroding USPS market share in a fiercely contested segment. The audit found that while over 99% of postage was accurately calculated, lapses in USPS oversight and technical misconfigurations still resulted in an estimated $1 million in lost revenue. In contrast, platforms overpaid USPS by $2.6 million for other shipments.
Breakdowns in Rate Governance and Validation Processes
The OIG attributed the shortfalls to weak quarterly validation processes and unaddressed programming flaws on third-party systems. Some platforms applied cubic pricing instead of standard weight-based rates, while others defaulted to rural ZIP code pricing when non-rural rates applied. These errors, while not always malicious, compromised the Postal Service’s pricing integrity in a system that depends on volume-based accuracy and competitive trust.
In response, USPS management said it is transitioning platforms to USPS-hosted software that enforces correct rounding logic and supports accurate rate application. The agency also emphasized broader use of its automated package verification system to reconcile discrepancies in postage. Issues related to rural/non-rural ZIP misclassification were resolved as of May 1, 2025, and the Postal Service plans to introduce more robust rate monitoring in future quarterly reviews.
Why Visibility Into Rate Logic Now Matters More Than Ever
As e-commerce expands and delivery aggregators become the primary access point for small merchants, platforms have effectively become the gatekeepers of shipping rate transparency. For USPS, this incident is a reminder that controlling the final mile isn’t enough, ensuring accuracy at the first digital point of rate calculation is just as vital. In a market where price differentials often drive shipping decisions, even small rounding errors can shift substantial volume to competitors.
