(Adds more on holiday issues, other price issue, background) WASHINGTON, Aug 10 (Reuters) - The United States Postal Service (USPS) said on Tuesday it is proposing to temporarily hike prices for some package shipments for the 2021 peak holiday season. USPS said the rate changes were similar to 2020. The proposed hikes that cover priority mail and other package services will take effect Oct. 3 through Dec. 26 once reviewed by the Postal Regulatory Commission. The USPS faced significant operational issues during the 2020 holiday season as package deliveries jumped as more shopping was done online. USPS delivered more than 1.1 billion packages during last year’s holiday season, more than 40% increase in full network packages. Postmaster General Louis DeJoy said in February the 2020 holiday delivery woes were compounded by COVID-19 issues that “profoundly impacted our service performance during that two-month period.... Too many Americans were left waiting weeks for important deliveries of mail and packages.” On Friday, USPS said it had finalized a plan effective Oct. 1 to slow down some first-class mail deliveries as part of efforts to cut red ink. DeJoy unveiled a plan in March to cut $160 billion in predicted losses over the next decade with the changes in service standards a key part. Separately, USPS will raise prices of first-class postage stamps to 58 cents from 55 cents starting Aug. 29. Price hikes are needed because over the past decade, mail volume has declined by 46 billion pieces, or 28%, while single piece first-class mail declined 47%, USPS said. Congress is considering a plan to provide USPS with $46 billion in financial relief over 10 years. In April, USPS said 138 new package processing sorters would be operational ahead of the 2021 peak holiday season. It also leased 45 additional annex facilities near processing centers in key locations to support surges and overflow of packages. (Reporting by David Shepardson Editing by Chris Reese and Aurora Ellis) Our Standards: The Thomson Reuters Trust Principles.