USPS Responds to Questions about the 2016 Rate Change

By Ina Steiner
EcommerceBytes.com
February 15, 2016





Online sellers who rely on the USPS to deliver their ecommerce orders had some changes to contend with when the Postal service rolled out a rate change on January 17, 2016. EcommerceBytes has been covering the changes closely.

We asked USPS spokesperson Katina Fields about the big changes and about some of the road bumps for sellers dealing with the new rates and rules.

"The Postal Service adjusts its shipping prices annually just like other shipping companies," Fields said. "Unlike other shippers, the Postal Service doesn't add surcharges for fuel, residential delivery, or Saturday delivery. The new prices represent the first price increase in more than three years for commercial Priority Mail."

"Also," she said, "unlike other shipping companies, the Postal Service is not implementing any new dimensional weight charges with this pricing proposal, continuing its commitment to deliver an excellent value for customers."

We also asked about the decision to phase out Commercial Plus Pricing - specifically the reasons why, and why so quickly. As we've previously reported, the USPS raised Commercial Plus prices as a whole by 13.3 percent last month and revealed in the fall that its goal was to eliminate the Commercial Plus category at some point in 2017.

Fields said, "The Postal Service announced its intention to phase out domestic Commercial Plus pricing to the Industry in October 2015, and the timing has not yet been determined when we will implement the new pricing."

We had additional questions about some of the specific changes that we saw sellers dealing with, here is the interview we conducted with Fields via email last week.

Why did the USPS remove Commercial Base pricing from Click N Ship?

Katina Fields: This change reflects the fact that most customers using the service are Retail customers using online postage and aligns the Postal Service's prices with those of competitors. Customers will still be able to drop items affixed with prepaid Click-N-Ship postage labels at the 32,000 local Post Offices or in more than 150,0000 collection boxes, schedule Package Pickup on usps.com or hand mailpieces to the 307,480 USPS carriers during their lines of travel.

Isn't it more cost effective for the USPS to have people print postage labels at home rather than bringing in to the post office?

Katina Fields: Oftentimes customers want the reassurance of a face to face scan so they often bring them to the post office even when they print labels at home.

Likewise, why is the rate for First Class Package Service parcels weighing between 1 and 3 ounces cheaper to bring to the post office (retail rates) than online rates (Commercial Base pricing)? ($2.54 vs. $2.60)

Katina Fields: It is anticipated that these prices will be aligned in a future price change.

Some PC postage providers and ePostage providers have begun charging sellers the retail rate ($2.54) for FCPS between 1-3 ounces instead of the Commercial Base rate of $2.60. Are those companies absorbing the cost (6 cents per package), or is the USPS extending the retail rate to those providers?

Katina Fields: The price point depends on the contract provisions of those customers/entities with the USPS.

Shippers now have no incentive to reduce packaging for FCPS packages weighing up to 8 ounces, since a 1-ounce rate is the same cost as an 8-ounce package ($2.60). Sellers have said they are changing from using envelopes to boxes for lightweight items - presumably it is more costly for the USPS to move bigger packages rather than smaller envelopes. Why did the Postal Service make the decision to move to a single price for packages up to 8 ounces?

Katina Fields: This change came about in our ongoing efforts to simplify price options. One price up to 8 ounces satisfies that demand. The Postal Service continue to look at ways to simplify price options. Note that boxes are often more easily processed than lumpy envelopes.

Did the USPS anticipate that sellers would shift to larger packaging for those lightweight items?

Katina Fields: Boxes are often easier to process than smaller envelopes.

When the Postal Service decided to extend First Class Package Service (FCPS) beyond the previous 13-ounce limit to 15.99 ounces, why did it only apply to online postage (Commercial Base pricing)?

Katina Fields: It is a commercial offering which will be evaluated during the upcoming months.

Did the USPS anticipate that Post office window clerks would mistakenly reject (or mark postage due) FCPS packages for over 13 ounces with online postage labels affixed?

Katina Fields: Ongoing training and communication is occurring.

Likewise, did the USPS anticipate that customers would be upset that postal clerks were (correctly) rejecting requests for the new FCPS rate for packages over 13 ounces when purchasing postage at retail rates at the window?

Katina Fields: The retail channel continues to provide training and communication about the price change.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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