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How 2020 Postage Rates Will Impact Online Sellers

USPS
How 2020 Postage Rates Will Impact Online Sellers

The US Postal Service filed its request for 2020 postage rates on Wednesday (Oct. 9). We took a quick-and-dirty look published in Wednesday’s blog, which you can read here. If approved by the PRC, the rates would take effect on January 26, 2020.

We also asked a couple of postage providers to weigh in with their thoughts to get something into today’s issue. Despite the tight deadline, Stamps.com’s Eric Nash provided us with his preliminary thoughts.

Nash’s initial impression of the 2020 rate change is that overall, the rate increases are relatively modest for 1 and 2 lb. packages – typical sizes for ecommerce shipments. For packages that weigh 3 lb. and higher, he said the rates get a little more painful, specifically for Zone 8.

Important Note: the rate comparison analysis that follows covers Zones 1/2 through Zone 8 and DOES NOT include Zone 9, which is for U.S. territories. Commercial Base Pricing was used for all rates.

Priority Mail

In its press release, the Postal Service said Priority Mail Express would increase 3.5 percent and Priority Mail would increase 4.1 percent, on average. Here’s what Stamps’ Nash had to say:

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Priority Mail (Regular)

  • Priority Mail (regular): The largest increases are in Zone 8, specifically for 4 lbs. and higher where the rates are increasing by at least $0.53 per package. (Priority Mail 4 lb. to Zone 8 increase to $18.14 from $17.61 in 2019.)
  • Priority Mail (regular) – for 1 and 2 lb. packages, the rate increases are fairly modest at a max of $0.17 for 1 lb. Zone 8 to $8.42 (increase of 2.0%) and an increase of $0.33 for 2 lb. Zone 8 to $11.19 (increase of 2.9%).

Priority Mail Regional Rates

  • Priority Mail Regional Rate Box A are no longer based on a 2 lb. Priority Mail rate. They have unique rates that are a little higher than 2 lb. Priority Mail rates.
  • Priority Mail Regional Rate Box A Zones 1 and 2 through Zone 5 have a max increase of 16 cents – which is pretty small overall (1.8% or lower). Farther shipping zones have a little more sting for Regional Rate Box A – Zone 6 is seeing a 42 cents increase (4.0% higher), Zone 7 is seeing a 58 cents increase (5.2% higher) and Zone 8 is seeing a 90 cents increase (7.4% higher). Since Regional Rate Box A is incredibly popular, that 90 cent increase for Zone 8 is tough.

Priority Mail Flat Rate

  • Priority Mail Padded Flat Rate Padded Envelope – increasing $0.20 to $7.75 from $7.55 in 2019
  • Priority Mail Medium Flat Rate Box increasing $0.40 to $13.20 from $12.80 in 2019
  • Priority Mail Large Flat Rate Box – increasing $0.70 to $18.30 from $17.60 in 2019

First Class Package Service

In its press release, the Postal Service did not provide the average increase for First Class Package Service. Here’s what Stamps’ Nash had to say about the 2020 rate change:

  • Packages that weight 9 ounces and higher are all seeing increases of 10 cents or more. Zone 8 at 15.999 ounces is seeing an increase of 17 cents (3.0%) to $5.70 from $5.53 in 2019.
  • This minor increase is a huge benefit for ecommerce sellers, since the 2019 increase was extremely painful with zone-based pricing being added and rates going up by 11% on average.
  • As always, First Class Package Service is by far the best deal in the shipping business. It offers nationwide delivery at $5.70 with tracking in 1 to 3 days. No other carrier can match the delivery service that First Class Package Service offers.

Parcel Select

  • Parcel Select is now cheaper than Priority Mail for all weights/zones. For 2 lb. Zone 8, Parcel Select is cheaper by 30 cents ($10.89) compared to Priority Mail ($11.19).

Priority Mail International

  • The average increase of a Priority Mail International 1 lb. package is increasing by $2.85.
  • Priority Mail International packages to the UK are seeing a 6.3% increase for 1 lb. package, to $53.34 from $49.97 in 2019.
  • Priority Mail International packages to Australia are seeing a 6.5% increase for a 1 lb. package, to $51.40 from $48.07 in 2019.
  • Priority Mail International packages to Canada are seeing an increase of 5.6% for a 1 lb. package, to $35.53 from $33.54 (Zone 1.3) in 2019.

First Class Package International Service

  • Delivery to Canada (Country Group 1) is seeing a big price increase. A FCPIS 1 lb. package to Canada is increasing by $3.32 to $19.71 from $16.39 in 2019. A FCPIS 3 lb. package to Canada is increasing by $5.46 to $30.40 from $24.94 in 2019.
  • Delivery to Australia/Asia (Country Group 3) is seeing a big price increase. A 1 lb. package to Australia/Asia is increasing by $4.03 to 26.36 from 22.33 in 2019. A 3 lb. package to Australia/Asia is increasing by $7.60, to $40.85 from $33.25 in 2019.

It’s worth repeating: This rate comparison analysis from Stamps.com only includes Zones 1/2 through Zone 8 and does not include Zone 9, which is for U.S. territories. Commercial Base Pricing was used for all rates.

Sellers who rely on the USPS to ship orders should keep an eye on the Stamps.com blog where the company publishes in-depth analysis on rate changes and provides other posts helpful to online shippers.

And if you have questions, please post them in the comments below.

Update 10/19/2019: Stamps.com published its guide to the 2020 USPS rate increases on its blog found here.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
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.

4 thoughts on “How 2020 Postage Rates Will Impact Online Sellers”

  1. Seeing the % that the PO is requesting makes me see red. Social Security Recipients COLA just was released for next year. It is 1.6%. Medicare will also be taking an extra $8.80 (it is assumed, no actual announcement yet) out of our checks, so I have calculated that at least for me, my increase will be around 0.97% or to make it simple about $0.46/day! We are real flesh and blood people that have everything around us going higher and higher in cost. But because the PO uses a different COLA and they propose and will probably get those hefty increases. Which for those of us that sell online to make ends meet or close to meeting will decrease our profits even more. So in essence, we are getting less than the general COLA. But those government guys making these rules are making a whole lot more than I sure ever made up to the point I became disabled. “The current salary (2019) for rank-and-file members of the House and Senate is $174,000 per year.” Before I became disabled I would have had to work for 5 years to make that much, and as an RN I had peoples very lives in my hands and actually saved several people’s lives during my career.

    Okay, what does this have to do with PO increases? Every year rates go up. When FC stamps went up from 50 cents to 55 cents, that was a 10% increase if my math is correct. Seniors living on very small amounts have to pay that fee when they buy a stamp. So even though their rates aren’t going up, those on SS still have to pay the increases. This is why I see red!

  2. @Moonwishes

    Well i don’t think we will be seeing an increase in price for the Forever Stamp for a couple of years at least as the Appellate Court found the previous 10% increase to have been illegal. The USPS has 45 days from Sept 13 to file another appeal or the PRC has reverse its support of the increase. Although it was a lot of money that citizens have spent on the new $0.55 stamps I doubt very much that we will ever see any of it refunded even to those that have accounts with USPS and the amount owed would be easy to calculate. Although they are no longer a government agency they still remember when they were when it comes to refunding any money. Once they have it forget about ever seeing any of it even if the charges were illegal.

    I can’t wait to see how this finally plays out as i am sure USPS will file an appeal and try much harder to win the next case or they may have to go a few years without any increases in the FCM price which will mean they just hide the cost somewhere else. Someday they are going to realize that continually trying to charge close to as much or more than the private companies is going to put the Sellers they depend on right out of business and then we will see how they manage to stay afloat. I can see a play from Ebay being put into effect soon, We will need to collect much more revenue from fewer sellers to make up for all of those that are no longer able to sell and ship anything.

    They have almost priced my category out of business or shipping the items in PWE or rigid cardboard envelopes with no tracking as those paying retail now have to charge $4.50 to ship up to 4 ounces in a padded envelope due to the zone rates and then Ebays 10% fee on shipping and the buyers are taking a firm stand and are now looking for nothing more than $3.50 shipping. Free shipping doesn’t play out well in my category because there is to much competition on Pricing so the Buyer knows the price is buried in the sales price. This causing more and more sellers from my category onto facebook to avoid the 10% FVF on shipping and many now ship without tracking but still use a padded envelope.

    USPS needs to wake up fast and become much more efficient in how they process things so they can afford to cut more staff and / or shut down more hubs completely.

  3. Well, I don’t agree that shutting down hubs is the answer. They did that once already within the past decade and that was a disaster to deliveries across the nation for quite a long while as they worked to get into the new, narrower groove.

    I also don’t entirely agree that reducing the workforce is necessary. As it is, there are many scrambling to do their own jobs and that can cause problems. When it comes to their workforce, they need to be training them better, keeping them thoroughly updated on and informed of changes and even offering managerial training, which SHOULD include branch organization. They can start with my PO. LOL

    One segment of the workforce that they SHOULD reduce is the temporary contracted segment. From what I have seen, it is these very people who are doing things like dumping mail in dumpsters and on the side of country roads and what-not. I also doubt very seriously that a full-time employee would jeopardize their job and retirement pension by drop-kicking packages around — unless they’re just so ignorant that they can’t even handle that job.

    So, I do agree that administrative changes need to be made and that things need to be more streamlined. Every time a USPS package crosses over to the hands of a UPS delivery person, you can rest assured that adds to the cost of delivering that package. Leasing space on somebody else’s plane (FedEx) is also costly and should be reexamined as a cost-saving endeavor.

    I really have to question the intelligence of the powers that be these days.

  4. “One segment of the workforce that they SHOULD reduce is the temporary contracted segment. From what I have seen, it is these very people who are doing things like dumping mail in dumpsters and on the side of country roads and what-not. ”

    So true. I get lots of stuff from Amazon as I do reviews for them. I have as part of my address so it is on every label they print out for my package, “Leave inside front door if needed”. So what do I find this morning when I head out to mail my orders, yet another box sitting in the rain that has been pouring down. We found two boxes outside as well. Last winter right as a huge snowstorm was starting I got home from groceries and found a package sitting outside being snowed on. A few more hours, we might not have found it until spring. Perhaps I have a new mail carrier as my old was hit retirement age this year or could be on vacation. She knew to bring the mail inside as she also knows I am disabled so difficult for me to play hide and go seek with the mail. At times they stick my packages in the neighbor’s garage. I spoke with the Postmaster and for a long time this stopped happening and it is bad now. Whoever is delivering the mail isn’t too concerned about it.

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