|EcommerceBytes-NewsFlash, Number 2457 - January 14, 2011 - ISSN 1539-5065 1 of 4|
The U.S. Postal Service informed the Postal Regulatory Commission (PRC) of its plan to raise postage rates of First Class Mail, Standard Mail and Periodicals effective April 17, 2011. Many online sellers will be affected by the increase in Media Mail rates, after already being impacted by the increase in Priority Mail and Express Mail rates on January 2nd (those products are not affected by Thursday's announcement).
The new rate change is a 1.7 percent increase averaged over all mail - actual percentage price increases for various products and services vary. Single-piece, 1-ounce First-Class letters will remain 44 cents with additional ounces increasing to 20 cents, up from 17 cents. The price for mailing a postcard will increase one cent to 29 cents. Full rate information can be downloaded from the USPS website (click on the link in the left blue navigation frame under "New April 17, 2011 Pricing Information").
Eric Nash, Director of Online Marketing for Stamps.com, said retail rates for First Class Packages (which go up to 13 ounces) will start at $1.71 (currently $1.22), and said the USPS is introducing a single-piece Commercial Base for First Class Packages, which will start at $1.56. Commercial Base rates give discounts to consumers who purchase their postage online through the USPS Click N Ship or third-party online postage services.
"We are excited to see the U.S. Postal Service has introduced a discount that will directly benefit ecommerce shippers," Nash said. "This new discount will allow sellers who buy their postage online to save fifteen cents per package when they ship using First Class Mail. That fifteen cents discount means any one shipping First Class Parcels over 3 ounces will see no increase in their per-shipment cost after April 2011. This definitely creates an incentive to use online postage."
For market dominant services, the Postal Regulatory Commission must approve the recommended price changes. The PRC had denied last year's USPS request to increase rates because they exceeded the Consumer Price Index, not allowed by the Postal Law of 2006. (The Postal Service filed an appeal of that decision with the United States Court of Appeals for the District of Columbia Circuit in November and awaits a decision.)
The USPS said yesterday, "The urgency of the Postal Service's current financial challenges requires this price change even as it waits for a decision from the federal courts on the exigent case."
The proposed price changes are expected to generate $340 million for the balance of the fiscal year and $720 million if implemented for a 12-month period.
First-Class Mail is the USPS most profitable product and generates more than half of total revenue. First-Class Mail volume declined 6.6% in 2010, 8.6% in 2009, and 4.8% in 2008.
USPS Testing Gopost Shipping Kiosks - January 06, 2012
USPS Shortens Hours on Christmas Eve and Closes Day after Christmas - December 22, 2011
New Senate House Bills Seek to Prop Up Ailing Postal Service - December 15, 2011
USPS Delays Closings until May Thanks to Senators' Requests - December 14, 2011
USPS Launches Express Mail Flat Rate Boxes for Overnight Delivery - December 12, 2011
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 email@example.com.
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