USPS has filed a notice of price changes to take effect early next year – here are the specifics
USPS made an announcement of upcoming price changes that will take effect January 27, 2019. A notice that was filed with the Postal Regulatory Commission shows possible price increases for many of USPS’s products and services. While Mailing Services product prices will raise approximately 2.5%, Shipping Services price increases vary by product. Unlike Mailing Services rate increases, which the USPS said are based on the Consumer Price Index, Shipping Services rates are primarily adjusted based on market conditions. The increases are intended to keep the Postal Service competitive while collecting revenue.
Here is an outline of USPS’s price increases that are most important regarding parcel shipping:
- Priority Mail Express will increase 3.9%
- Priority Mail will increase 5.9%.
- Small Flat Rate Box will increase from $7.20 to $7.90 (8.9% increase)
- Medium Flat Rate Box will increase from $13.65 to $14.35 (4.9% increase)
- Large Flat Rate Box will increase from $18.90 to $19.95 (5.3% increase)
- APO/FPO Large Flat Rate Box will increase from $17.40 to $18.45 (5.7% increase)
- First-Class Package Service, a lightweight expedited offering used primarily by businesses for fulfillment purposes, will move to zone-based pricing to better align with the cost of service and improve value based on distance.
- The Postal Service will continue to omit surcharges for fuel, residential delivery or regular Saturday or holiday season delivery.
“The PRC has to approve this, and the USPS has, on paper, been losing billions per year for many years, and the current balance sheet is unsustainable. The USPS does not lack volume. It lacks pricing that volume to cover the attributable costs for transporting and delivering those items (mail and parcel),” said Jerry Hempstead, president of Hempstead Consulting.
Despite financial struggles, the USPS’s Shipping Services Group continues to post notable volume and revenue gains, mostly due to its Parcel Services and Package Services groups, which is fueled by the continuing growth of e-commerce. This subcategory is mainly a “last-mile” service that “bypasses much of our infrastructure and therefore is one of our lowest-priced package services, and as a result, produces a lower yield per piece when compared to many of our other services,” according to a Form 10-Q statement released earlier this year.
Did you know that “rate changes” is the number one carrier-related shipping concern?
Most shippers will likely experience a 5% or greater increase with USPS’s parcel pricing changes, so it is important for companies who ship to stay on top of these changes that occur. Although the Postal Regulatory Commission still has to review the proposed prices before taking effect on January 27th, staying abreast of shipping expenses and rate changes is crucial, since these costs directly impact consumer purchasing decisions and bottom line profitability. For shipping vendors and policies, one size does not fit all.
USPS Rate Changes: What does this mean for ProShip Customers?
At ProShip, we are committed to providing our customers with all USPS updates as soon as they are accessible. Once the new 2019 USPS rates are made available, customers utilizing automatic updates will receive these updates without intervention or downtime using the ProShip Update Tool.
We value our partnership with USPS. ProShip is one of the first shipping software engines to be Manifest Analysis and Certification (MAC) Certified from USPS. MAC was developed by USPS to evaluate manifesting software and tests its ability to produce accurate postage and fees, as well as quality documentation. This certification highlights ProShip’s commitment to offer the best carrier compliant, multi-carrier shipping software to its customers.
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