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Tips on Dealing with the 2018 Postal Rate Increase – Part 2

USPS United States Postal Service

USPS United States Postal ServiceIn part one of this two-part series, we outlined some of the major changes in the USPS postal rates for next year going into effect on January 21, 2018. In part two, we delve into some additional tips provided by online postage providers.

ShipStation Director of Strategic Partnerships & Business Development Krish Iyer said the key areas being impacted are:
– Flat rate boxes
– Parcel Select (highly popular with e-commerce merchants)
– Higher ounce First Class Package Services (anything above 13 oz. has a substantial price increase)

Iyer said merchants should maximize postal discounts by using USPS Commercial Plus Pricing (CPP), which can be more than a 30% savings over the retail rate for first-class services. “Companies like ShipStation offer merchants the ability to have these CPP rates instead of trying to negotiate discounts with the USPS.”

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And Iyer said merchants should have the technology tools that show rates and allow for robust reporting. “Can you pinpoint what your actual shipment weights are and how this change would affect your business?”

Stamps.com Senior Director of Online Marketing Eric Nash said the following three areas will impact ecommerce sellers of ALL sizes (prices below are based on Commercial Base pricing):

1) Priority Mail Padded Flat Rate Envelope
Costing $7.10 (2018 rates) for nationwide delivery typically within 1 to 3 days, sellers often use the Priority Mail Padded Flat Rate Envelope to ship smaller items. The Padded Flat Rate Envelope expands allowing sellers extra space to include a small box for protection. For 2018, the Priority Mail Padded Flat Rate Envelope is increasing by $0.60, to $7.10 from $6.50 in 2017.

2) Priority Mail Regional Rate Box A
Priority Mail Regional Rate Box A is a popular option for e-commerce sellers since the box is medium-sized and comes in two variations, top loading and side loading. Regional Rate Box A can hold up to 15 lbs. but the cost structure is built at a 2 lb. regular Priority Mail package. For 2018, Regional Rate Box A packages traveling to Zone 8 will see an increase of $0.52, to $10.80 from $10.28 in 2017. One area of good news – Zone 5 for Regional Rate Box A is not increasing at all, staying at the 2017 rate of $8.15.

3) First Class Package Service:
While First Class Package Service rates are going up for all ounces, there are four ounces in particular to pay attention to:

8 ounces – increasing by $0.41 ($3.18 in 2018)
14 ounces – increasing by $0.36 ($4.38 in 2018)
15 ounces – increasing by $0.50 ($4.66 in 2018)
15.999 ounces – increasing by $0.64 ($4.94 in 2018)

As noted above, Nash says even with higher prices, FCPS remains the best deal in the shipping industry among all shipping carriers.

ShipRush Product Manager Rafael Zimberoff also noted the importance of paying attention now to every ounce when it comes to First Class Package Service, which should be considered for items that aren’t high value and are under 16 ounces. “Half of items sold on eBay fall into this category,” he said, from small electronics to certain types of clothing.

Zimberoff noted that sellers of larger items – barbecues, for example – may be using UPS or FedEx exclusively for their main product lines, but when sending spare parts or other small items, they should send them USPS First Class Package Service.

He said sellers who bundle shipping costs into the price of their items should raise their prices by 10 – 30 cents to make up for the increase in postage – and you don’t have to wait to January. Sellers should consider gradually increasing product prices (or shipping costs) now in the weeks before the rates for each carrier goes up. You don’t have to wait until rates actually go up, he said – you can phase it in and make it a gradual adjustment.

Information about UPS and FedEx Rate Increases

UPS will raise rates by an average of 4.9% on December 24, 2017. It cited its continued investment in its network to support customer growth and service needs. UPS will also increase certain surcharges in July of 2018.

FedEx will raise rates in January. US shippers will pay an average of 4.9% more beginning January 1, 2018. FedEx is also raising rates for surcharges, including for Address Correction and Residential Delivery.

Notably FedEx is adding dim-weight pricing to FedEx SmartPost effective January 22nd, when it will also change criteria and pricing for packages that require additional handling, are oversized, or are unauthorized.

The shipping carrier also reminded shippers that it would increase certain surcharges for shipments during the holiday shopping season (Nov. 20, 2017–Dec. 24, 2017), as it had previously announced on August 3rd.

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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