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USPS Says No Overall Increase in Priority Mail Rates Ahead

Small online merchants and marketplace sellers rely on the USPS for much of their shipping needs, including Priority Mail. The Postal Service filed its price changes for 2014 with the Postal Regulatory Commission (PRC) last week, which will review the prices before they become effective on Jan. 26, 2014, and all eyes are on the new shipping rates.

Surprisingly, there is some good news in last week’s announcement. While there is an overall 3 percent increase in Priority Mail Express (formerly called Express Mail), “There is no overall increase in domestic Priority Mail prices,” according to USPS spokesperson Katina Fields – the key word being “overall” – there are some changes with which online merchants should become familiar.

As we previously noted, many of the Priority Mail Flat Rates are not changing in January – only large Flat Rate boxes will experience an increase: they will increase to $17.45 (up from 16.85); and large flat rate boxes for APO/FPO/DPO will increase to $15.45 (up from $14.85).

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Stamps.com Director of Online Marketing Eric Nash also noted that on Priority Mail and Regional Rate Box A, some of the rates are staying the same or are getting lower in 2014. (Be sure to note the chart shows the differences, not the actual rates.)

Regular Priority Mail is popular with small sellers because the USPS provides free packaging for that service, which also now includes free tracking (formerly called Delivery Confirmation) and free insurance, and its rates and speed of service provide a balance for small businesses trying to satisfy shoppers who are being trained by some retailers and marketplaces to expect free and fast delivery of their orders. In fact, Priority Mail represented 56% of total Shipping and Packages revenue for the USPS in fiscal year 2013.

Nash also noted, “for First Class Package Service, it looks like the rates are increasing for the lower ounces.”

In a press release, the USPS said when new Postal Service Shipping Services prices take effect in January, customers would see an overall price increase of 2.4 percent.

Wednesday’s submission for new rates for competitive products is separate from the USPS exigent request in September for a rise in market dominant prices higher than the limit allowed it under ordinary circumstances. Fields pointed out some highlights of the new single-piece First-Class Mail pricing:

  • Letters (1 oz.) – 3-cent increase to 49 cents;
  • Letters additional ounces – 1-cent increase to 21 cents;
  • Letters to all international destinations (1 oz.) – $1.15;
  • Postcards – 1-cent increase to 34 cents.

See more information on the USPS market dominant rate request in September’s Newsflash.

The USPS said it expects nearly 15 billion pieces of mail to be delivered between Thanksgiving and New Year’s Eve, and competitive package volume is expected to increase by approximately 12 percent from last year to about 420 million packages during the 2013 holiday season.

The busiest mailing day this season is projected to be Monday, Dec. 16, when more than 600 million pieces of mail are expected to be processed. The same day, 6 million customers are expected to visit Post Offices nationwide. The busiest delivery day for mail will be Wednesday, Dec. 18 and the busiest day for packages will be Thursday, Dec. 19.

To see the new rates on competitive products submitted to the PRC on Wednesday, visit the PRC website, and find Stamps.com analysis of the price changes on the Stamps blog.

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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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