More details of the May 12 rate increase were released today. With these announcements, the USPS continues it’s shift from a mailing service to a shipping service.
With dropping volume in letter mail, the USPS has been emphasizing their packages services in recent years. They have been particularly aggressive with flat rate Priority Mail boxes, targeted at eBay sellers, and Express Mail services.
Two rule changes allow them to become even more competitive in the package services (shipping) market. They will now use zones to calculate the postage on shipments that formerly had fixed prices, and they are now able to offer discounts based on mailing volume and source of sale (online shipments for example).
Here are some of the details of the new shipping rates…
Here are the major changes to Priority Mail:
- Customers can pay less by buying online.
- Flat-Rate boxes are now offered in a new, 50% larger size, designed for businesses.
- A new, reduced Flat-Rate box price for APO and FPO (military) addresses.
The USPS has always been very effective in high volume situations. New prices will
leverage and expand this advantage.
Parcel Select is shaping up to be a very interesting service. We’ll concentrate on it further in future discussions. In the meantime, you should check it out if you ship a lot of small parcels. Bound Printed Matter has always been a very efficient method of shipping books. Parcel Select will spread the cost savings to other types of parcels.
Normal pricing will continue to apply to customers who come to the Post Office, but now they’ll find lower prices if they pay online, use corporate accounts, or meet minimum daily volumes.
Previously, USPS prices were a higher than other shippers for short distances and a lot lower for some long distances. With the move to zone-based pricing, their prices will be more attractive for short distances — where most of the volume is — and still have a price advantage for more distant points.
For pieces up to 5 pounds, USPS prices are better than FedEx for every zone. Express Mail is the only product with Sunday and holiday delivery (for a $12.50 premium). Unlike other shippers, the USPS has no Saturday delivery surcharge.
There are so many more subjects, there will have to be more articles. To summarize, the USPS is redefining itself to not only handle its traditional role of letter carrier, but to expand services to include package services, returns processing, and international shipping. They’ve always performed these tasks. They’re just shifting the balance of their pricing and marketing to reflect the changing business environment.