U.S. Postal Service Lowers Package Rates
Friday, September 12th, 2014
The U.S. Postal Service is lowering package rates — dramatically in some cases — in an effort to capture e-commerce business.
The Postal Service has notified the Postal Regulatory Commission that it intends to change the cost of Priority Mail shipments. The changes would reduce the cost of Priority Mail shipping for high-volume customers, business customers, and those who utilize e-commerce shipping solutions.
In an official statement on the rate proposal, Nagisa Manabe, the Postal Service’s chief marketing and sales officer, explained:
“The Postal Service is a vital business partner for small and large businesses and lowering shipping prices will save them money and improve their bottom line. With our affordable shipping options, we hope to attract new business customers and become their preferred delivery service.”
Some of the highest-volume shipping customers with the U.S. Postal Service could save as much as 52 percent per shipment, reports the Wall Street Journal. To get those discounts however, a business would have to send at least 50,000 packages per year.
Still, the Postal Service will offer discounts on Priority Mail to business customers. The greater discounts on shipping are for packages going shorter distances.
Most of the price reductions will be realized on packages weighing between 7 and 16 pounds and that don’t require air travel to ship longer distances.
The discounts will only be available for customers who use the Postal Services’s Commercial Base and Commercial Plus plans. The average discount on a Commercial Base shipment will be just less than 1 percent. Commercial Plus customers will get an average 2.3 percent shipping discount under the proposed rate structure.
Commercial Base customers don’t have any minimum shipping requirements. Reduced Priority Mail rates will be available for those shippers who use Click-N-Ship, PC Postage products, permit imprints, or digital mailing systems (meters) that generate an IBI (Information Based Indicia) and submit data electronically to the USPS, according to the official announcement from the Postal Service.
As the Postal Service is aiming to attract more e-commerce business and other corporate customers, the new rates would impact consumers at the retail level.
Priority Mail prices will actually increase if the shipping is purchased at a Post Office or some other retail location. The Postal Service says that, on average, Priority Mail rates would increase 1.7 percent.
For instance, the rates for Priority Mail – purchased at a Post Office – would be $5.95 for a small box, $6.10 for a padded envelope, and $17.90 for a large box.
Will new rates help smaller e-commerce businesses?
Based on what the Postal Service is offering, smaller e-commerce businesses can expect to see a small reduction in rates. This is especially true if an online merchant uses the suggested services or something like Amazon fulfillment for their shipping.
Amazon, which ships a much larger volume of packages per year, would presumably offer more reduced rates.
Courtesy: Small Biz Trends
