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August 25, 2006 3:00 PM, EDT

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he U.S. Postal Service’s share of the air shipment market increased to 37.7% in 2005, as compared with 37.1% in 2004, according to a report from the Colography Group.

The increase is related to strong demand for USPS’ Priority Mail deferred air product, the group said Friday in a statement. Priority Mail demand had slumped after a 15% rate increase in 2002.

Deferred air shipments rose 4.2% in 2005, while overnight air traffic gained 1.9%. Priority Mail accounts for about three-quarters of total growth in the deferred air shipment category, Colography Group said.

Overall, air shipments increased by 3.2% to 2.5 billion shipments, posting gains in letters and envelopes, packages and freight. Air shipment revenue rose 5% to $33.6 billion in 2005.