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Brace for Another USPS Rate Hike in 3 Months

Brace for Another USPS Rate Hike in 3 Months

The US Postal Service raised rates on Sunday (July 10) and made some other changes as well. And if recent history is any guide, USPS rates will rise again in 3 months.

USPS First Class Mail rates (considered “dominant” services) went up by an average of 6.5% on Sunday. That includes the cost of a stamp rising to 60 cents.

Most “competitive” services were not affected, though the USPS did make some price and classification changes to Priority Mail, Parcel Select, and certain International Special Services, which we summarized in this May news story.

Significantly for online sellers, the USPS now includes $100 “baked-in” insurance for Priority Mail domestic outbound service and Priority Mail Returns service.

In announcing the higher insurance coverage, the USPS had said it was an effort to enhance the customer experience and grow revenue with added benefits – and to “assist with becoming the Shipper of Choice with value-added services.”

However, we continue to hear anecdotal reports from sellers who say they’re unable to get the USPS to honor insurance claims (feel free to share your experiences in the comments section).

The USPS also raised rates for certain services, including Mailbox rentals (6.8% higher) and money orders (14.4% higher) – see details in this April news story.

The Postal Service used to raise rates once a year, each January, but Postmaster Louis DeJoy told mailers to expect rate changes twice a year, each January and July.

But as online sellers know all too well, the USPS also implements rate hikes each holiday-shopping season. It began the practice of “temporary rate adjustments” in 2020 (October 18 through December 27, 2020), and last year, it imposed the holiday surcharge between October 3 and December 25, 2021). Sellers, brace yourselves for another rate hike in 3 months.

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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

20 thoughts on “Brace for Another USPS Rate Hike in 3 Months”

  1. I’m glad you asked for comments regarding USPS not honoring their insurance, because I was already planning to when you mentioned the increase in the coverage for priority mail packages. What good does an increased amount of insurance do when they don’t ever pay out claims? I have multiple claims being investigated my my representative in Congress. One was finally paid out after many months of phone calls, e-mails, appeals, etc. And yes, Congress was needed to get that one approved too! For a while there, I was insuring most packages valued at about $80-100 or more. They were losing so much, and were honoring at least a good portion of the claims (after making you wait an exceptional amount of time, but at least they were paying a lot of them out). But about a month ago, I decided to not insure anything under $500, and in some cases higher. It’s just not worth the hassle and the expense if it’s going to be a fight every single time. Not to mention the cost of insurance keeps going up too. The post master general should change his name to DeStroy, because that’s what he seems to do with each passing day.

  2. All set.
    That just means smaller Postal Money Order refunds for my customers.
    I initially Over Price the shipping….customer pays up front…then I calculate at time of shipping.
    USPS prices are inflating at a pace that REQUIRES this approach so neither of us gets ripped off.
    The only catch is : having willing customers that can still afford these inflated shipping prices.
    This can’t go on forever.
    At some point USPS and the others will bring America to its knees. That’s what they want.
    So, now I’ve invented the Shipping Escrow.
    Communism in America must be defeated.

    1. Stop the nonsense! All customers can add 2 numbers and they all do. They compare the total price to them to other sellers total price and then choose. Whatever your shipping charge is, from Free (Yea sure) to infinity, that is what the customer thinks is the best deal. Any attempt by them to get money back is just a rat nibbling at your cheese. Tell them it was shipping and handling, which it is.

      1. No, Baby Cakes, I have ZERO competition :o)
        So, the Postal Service is making or breaking the whole scene.

  3. This is price gouging for USPS shipping cost. Its putting many sellers out of business. But the USPS could care less that they lie about how many times per year they will raise rates. They lie about how long it will take to deliver packages. They are horrible to do business with. The USPS will eventually price themselves right out of business. I have a USPS priority mail package that was shipped 6/19 and it has been lost and never delivered. I have a USPS parcel select package shipped 6/16 and still not delivered. Costing me a lot of time to file claims and money lost because of giving refunds, and the claim is not paid. The USPS is a garbage shipping service who keeps raising rates and NOT delivering, causing huge problems for sellers. This is BS !

  4. USPS is a disaster. I live in Atlanta near the airport and all 3 post offices within a mile have been closed during normal working hours. One allegedly was burgarlarized which is no surprise as a man was shot and killed using an outdoor ATM in a parking lot next to the post office.
    The main post office nearest the airport was closed when I went to mail 3 packages one evening (they normally close at 10 pm). The air conditioning has not worked there for almost a month so it is hardly surprising as employees are probably calling in sick and using vacation. How can they let what is probably the largest and busiest post office in Atlanta randomly close? When I went to mail the same packages the next day the USPS employee said she could not scan the prepaid labels because of the date. I pointed out I tried to mail them the day before and had no idea the facility was closed. I am sick of their stupid games.
    Last summer I mailed a package to South Carolina and it took 3 weeks to arrive. I mailed a large package on February 10 to Norway and it arrived April 20.
    All of this makes me look bad as a seller. Also USPS has no program for partial refunds when they totally drop the ball. So they continue to raise rates for horrible service.
    Keep in mind unlike UPS and FedEx which have their own fleet of aircraft, USPS relies on commercial flights. Any news site has numerous stories about cancelled flights because of employee shortages (especially pilots). As a nation we need to come together and demand better of the federal government.

  5. At the height of the Covid lockdowns I had 2 claims that were no-brainers but were denied and the appeals were also denied. Through the process their denial was accompanied by a form letter detailing the process of what they expected from me. Each time they took a month or more to respond, claiming Covid, so by the time of my last appeal, eBay records were pretty much gone.
    USPS wouldn’t take the time to explain exactly why I was denied, but I have an idea (too late after the eBay screens were closed) what was missing.
    Before eBay Managed Payments, I never had a claim denied using Paypal screen shots.
    The difference is, if you read very precisely what the USPS requires, is a screenshot showing your name, the item, how much it was sold for, ALL ON THE SAME SCREERNSHOT. I had filed all that info and more that they wanted, but nowhere did one screenshot put my name on the same page as the sale of the item (eBay assumes when you are logged in that you know who you are). Looking back when it was too late, The only thing I could find which might be accepted is a packing slip image.
    However I haven’t tested this out as I haven’t shipped any golf clubs using USPS since the big postal increase on those ( that’s where they were ripping open their own Priority boxes). and for items I choose to insure for over $100, I’ve used that other company Shipcover but haven’t had to make a claim yet.

  6. Sad there is NO one that will listen to the small sellers, these rates are killing us. I’m already preparing closing up business with in the next 2-3 years, I’m running out of items I can sell now.
    I had a package go to Colombia GA, carrier left a note to set up redeliver for a 4×6″ envelope which if a note fit so would have the package, then buyer went to pick up and they can’t find it. After 3 open and close research inquires(requesting a phone call back), the PM finally called me, was the rudest PO I’ve ever talked to and said “sorry we lost it, it happens” UH HOW when you left a note. Then proceeded to blame me for not insuring it and STOP bothering her with anymore reports. I ship 200-300 packages a month, at $2 a pop for insurance to cover around $30 in lost or broken packages per year is sense less. I always thought it would ebay that would destroy my business with all their craziness but it’ll be the USPS.
    Unlike the FEDEX and UPS, the PO is not a for profit business, was not set up to be and now that congress has bailed them out and fix their retirement plan, they are out of the red.

  7. I have a love-hate relationship with US Postal service. Their delivery of my items I sell on ebay has been actually very good this year, so I want to give credit where credit is due. I purchase about $500 a month in shipping/postage, most of it with the USPS.

    But when it comes to insurance for damaged items, my hate for USPS is at an all time high. As some readers have suggested, there really is no such thing as “insurance” because they make the claims process onerous and virtually impossible. Case in point – last year I sold 2 Starbucks mugs, one of which broke en-route. It was only about a $5 item, but for me to file a claim, the brainiacs at USPS wanted me to have the buyer ship it back to me in original box (at my cost of course) then take it to my local post office to file the claim. Photos of the damaged product are not enough. All told, last year, I lost about $200 or so in broken items. I have since taken on fewer “fragile” items due to this lack of insurance, and am glad to report that I have not had a broken item in over a year now….but the bad taste remains.

  8. Evidently this increase is just for us small shippers to offset USPS discounts to the large shippers, as I have noticed recently Amazon shipping really large, heavy, and some way oversize packages by USPS. These same items in the past would have only been delivered by an Amazon truck due to the surcharges USPS would impose, and were the same items that had free shipping and no increase in cost from previous purchases.

    My carrier now sometimes has to come back twice, as the little standard mail truck often can only hold a few of these big Amazon boxes. Plus a hand truck is often needed to bring them to the door.

  9. Sent out an 8 ounce book Saturday by Media Mail. $ 3.19

    Sent out an 8 ounce book today (Monday) by Medial Mail $3.49

    A 30 cent increase. People already hate to pay postage and seem to think you can send it with a stamp.

    1. Now we’re all like Pavlov’s Dog.
      Hear about rising costs, expecting SUPER poor performance on top of the poor performance from the Last rise in costs.
      Won’t be very long before : Uncle Harry is going to (pick a state) ….got anything you want delivered ?

  10. *** Sellers do not pack well ***

    I had a recent sale of jewelry where my customer ask me to make sure that when I ship, I use extra bubble wrap with extra pieces of cardboard. I thought…really?…is this what this buyer is use to? So, I reached out to the buyer to let her know that I use strong external shipping boxes with a 200 lb. crush test…so she should not worry.

    Yesterday, I got a rave review from the seller who not only loves her new necklace, but loved the fact that I use “secure” shipping. And now, she’s interested in 2 more pieces from my shop. Soon, she will be “another” repeat buyer.

    If I were USPS, I would only insure for lost packages because…THERE ARE TOO MANY SELLERS WHO GO CHEAP ON PACKAGING…and this is not the fault of USPS.

  11. *** Be careful what you ask for ***

    And yet, “DeStroy” is finally balancing the books for USPS, as USPS began to lose money because of the internet. All those retail ads (junk mail) that was put in peoples mailboxes began to dry up as more businesses began to rely on online marketing and it was the “Ad Dollars” that allowed USPS to exist with a positive cash flow. Mostly, the banking industry and their never ending mortgage offers were paying good money to distribute their mail.

    And this is not only a problem is the US, but internationally, where postal services everywhere are no longer generating the Ad revenue, as they once were. And to think, it was all that junk mail that kept shipping prices steady for consumers.

  12. @Whatayear
    I cannot comprehend how the USPS is putting sellers out of business. That is a lame excuse. If a seller’s business is failing, I will guarantee you that the US Postal Service and their rate hikes have very little to do with it. Poor business decisions and the inability to price product correctly is the cause – Not the Post Office – there are way cheaper options available to everyone. I live out in rural Arkansas and do not have an issue with getting packages shipped via UPS or FedEx.

    USPS has made it very clear that they do not want your packages or your business. UPS services are cheaper, package survival rate is way better, they actually pay their insurance claims, and most towns have at least 1 UPS store and 1 UPS community pickup center so you do not have to pay for pickup at your door.

    If you do go with pickup at the door, then in many cases UPS and USPS are similar in cost. UPS is still less expensive for me, because of the surcharge.

    1. Exactly the “USPS has made it very clear that they do not want your packages” and the reason their hurting businesses. Its not poor business decisions, its because the higher rates are reducing inventory that can be sold. There are no other shipping options for items weighting less then a pound.
      As far as UPS, my nearest drop off is 15 miles away, added time and gas, big on profit. I use to sell fishing rods but they have to be dropped of at a main depot, the little ones are limited to 16″. Plus I have to buy boxes to ship, which have doubled in the last year and once you hit 49″ its no cheaper then USPS. UPS rates for a box $10 up to 48″, 49″ jumps to $21 and add $3 for box, 12% fee ebay charges on FVF, shipping and taxes, listed shipping is now $16.

  13. I find it very interesting how sellers complain about USPS raising their rates to cover expenses. UPS and Fed Ex raises there rates every year and have many surcharges. Fedex service is the worst. In my 9 years selling, we only ship via USPS because of their shipping rates are cheaper for the items we ship as well as the free pickup. We have seen delays occur during the covid times but over these 9 years and 25k plus packages shipped we have had only a 2 or 3 not show up as delivered by USPS where the customer complained and how to do something about it. Most of our packages are 1st class so we have not filed any claims as all the Priority Mail packages we have shipped over the years have shown delivered. Some people forget that labels get damaged so they cant be scanned delivered and a customer says they never received it even though they were delivered. USPS should make all those packages be returned to sender when they can see return address and do not deliver them. Our biggest problem is the scammers saying they did not receive the package when it shows delivered or saying something is wrong with the item they received. When we mention to contact USPS as they has GPS tracking and they have Postal Inspectors/police that can investigate, 99.99% we do not hear from again.

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