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Sat June 22 2019 22:48:21

Would Life Be Grim without Postal Shipping?

By: Ina Steiner

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What would happen if the USPS raised prices for shipping packages, or was forced to stop delivering packages altogether? Those are questions the Package Coalition addressed in a tweet, painting serious consequences of life without USPS package delivery. 

For small online sellers, the picture is especially concerning since they have little bargaining power as individual shippers, and so many rely on the Postal Service for shipping packages.

The Package Coalition, of which Amazon and the National Retail Federation are members, pointed to analysis by a consulting firm SLS Consulting that estimated the cost to American households of such changes to be between $16.2 billion and $35 billion annually - with between half and all of it benefiting the shareholders of UPS and FedEx.

The Package Coalition tweeted the following on Wednesday:

"Members of the #PackageCoalition rely on affordable, reliable package delivery services to grow their business, create jobs and exceed customer expectations. Raising prices for package delivery will hurt small businesses and consumers. More info here: http://ow.ly/zEpA50iYuQt."

The SLS Consulting report stated that the Postal Service is under pressure to increase prices for packages and said some are trying to force the USPS to exit the market completely. What would be the impact of such moves?

"It is difficult to confidently predict competitors' responses to increased prices or market exit," the report stated. "Under these circumstances, scenario analysis provides a useful framework for discussing policy options."

In the first scenario, the consultants imagine the impact of a USPS price increase of shipping rates of $1.50 and say it's reasonable to assume those costs would be passed on to households - about $16.2 billion. 

In the second scenario where the USPS completely withdraws from the market under new legislation requiring it to do so (remember, this is all hypothetical), the consultants layout what might happen: "UPS and FedEx don't increase their prices but all shipping that used to run through the Postal Service now switches to them. Prices for these shipments reflect average current price differentials in a variety of markets, about $5 a piece. Of course, if this number turned out to be only half of that, impacts would be reduced by half."

In that case (scenario two), the impact of the USPS withdrawal would cost American households about $25 billion dollars annually, it estimated.

The third scenario is the same as the second, except that without competition from USPS, UPS and FedEx increase their own prices by a dollar. "All shipping that used to run through the Postal Service now switches to them. Prices for these shipments reflect average current price differentials in a variety of markets, about $5 a piece, plus the $1 additional increase."

In that case, it estimates that a withdrawal of USPS from the package business and a resulting price increase from rivals would cost American households about $35 billion annually.

You can read the full report published on the Package Coalition website (PDF file).

The fact that companies are seriously contemplating a world without USPS shipping is eye-opening, and there's no doubt small sellers would be impacted. 

However, it's worth noting the analysis leaves out one wildcard: the possibility that Amazon could open up package-delivery to online sellers.

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Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

This user has validated their user name. by: The End

Mon Jun 24 09:31:16 2019

Seems to me there's an orchestrated effort to rid America of its Spirit.
The American Postal Service is steeped in history.
It's the core of the inner workings of this country.
Along with the removal of historic statues, and the flagrant disrespect of our laws, We Have a Contamination problem.
We'll fix it.

Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

by: epuise This user has validated their user name.

Mon Jun 24 09:35:37 2019

I lost a sale that WOULD have shipped USPS, or, UPS, or FedEx... the new DIM weight DOUBLED the postage COST... making shipping TWICE the cost of the item... I am now only selling large / heavy items LOCAL now... No postage to shipping carriers, no fees to online venues, no fees to payment processors... LESS WORK for ME... no hours of packing, no SNADS, no tracking/hand holding... 50% of the population did NOT get a 'Tax Cut', nor are their PayChecks rising above inflation... Welcome to The Recession... Less money for everybody... Hope the greedy billionaires are happy when THEIR profits go DOWN.

Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

by: Flying Childers This user has validated their user name.

Mon Jun 24 09:45:50 2019

Silver Ice King- EXCELLENT points.  Hope someone in power reads your post.

Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

This user has validated their user name. by: toolguy

Mon Jun 24 09:52:49 2019

@epuise

Heavy items didn't go up in price!

Only large "light weight" items did.

Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

This user has validated their user name. by: Lightning

Mon Jun 24 13:23:40 2019

Just did a quick query on the USPS Postage Calculator.  A 1lb. box of any size up to a cubic foot (12''x12''x12'') sent from Washington, DC 20003 to Beverly Hills, CA 90210 is $9.30 by Priority Mail.  Flat rate packages are less or more depending on size, you know the rates on those.  

If you add even 1'' to any of the 3 dimensions to go over a cubic foot, such as 12''x12''x13'', it goes to exactly $50.

WOW!!  Over 5 TIMES the cost.  And almost every time you add an inch to any dimension over that, it goes up another couple of dollars.

Of course, there probably isn't such a package, as the box alone might be over a pound.  But here is a more realistic comparison, same cross-country trip:
5 lb. box under a cubic foot = $25.25
5 lb. box 12x12x13 = $71.35

Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

by: mcposty This user has validated their user name.

Mon Jun 24 14:20:22 2019

Oh please, usps does absolutely zero for small sellers. They do not even have a discount program for small to medium sellers, instead, we have to get it through third parties like ebay, amazon or stamps, and those discounts are only doled out arbitrarily to shippers so that said third party companies can keep a profit.

I also see that every year usps gets closer and closer to other shippers rates, and indeed, a lot of times with packages, ups or fed ex can be a lot cheaper...now that usps has dim weight as well and their first class is zone based.

Of course, there is USPS giving chinese sellers unfair advatages in shpping rates, causing them to be able to beat everyone's prices and kill us trade.

They also kill small business by giving large entities even more power to win with lucrative rates, such as Amazon.

I have zero respect for the usps, who are traitors in my eyes.

If they want to truly help, they need to open up programs for small to medium busnesses, who still have to pay the same rate as normal people who don't ship that much.


The only thing we would truly miss is the first class rates, but like I said, those go up every year now and is not such a great deal.

oh, they also defy congress who explicitly said usps can only raise rates IF they don't force people into priority by making all other services worthless. Guess what? Parcel select is MORE than priority.










Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

by: purpleiris This user has validated their user name.

Tue Jun 25 06:50:19 2019

Small business owners already have access to commercial base rates on sites like PayPal, PirateShip, etc. So I don't understand why anyone would claim they don't have access to commercial rates. This is the second time this month that I've heard this claim.

Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

by: mcposty This user has validated their user name.

Tue Jun 25 12:20:17 2019

Because those commercial rates are not the full story iris. Paypal takes a cut, and those rates still are not even close to what other large companies get. We can't even klnow how much of a deal paypal is truly getting and NOT passing on to it's users.

Instead, usps should just give the discounts directly.

Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

This user has validated their user name. by: Lightning

Tue Jun 25 14:28:03 2019

I suspect we are not offered the rates directly because most small to medium sellers wouldn't make the volume requirement to get the rate.  Even a large seller, on his own, is probably a fly speck.  You have to have serious volume to be sniffing around lower rate options.  

We're probably lucky that PayPal, Pirate Ship, Stamps.com, Endicia, and even eBay pass ANY of the savings through.  There's no requirement on their part to do so.  They could charge full boat and just claim they are making it more convenient than each of us setting everything up ourselves - order integration to and from the site, tracking reporting, default shipping preferences, address books, etc.  And they would be correct.  

Click and Ship is not user-friendly, and not all services are even available.  I'm not going to complain about the small % the shipping providers keep.  Well worth the benefits.  It can't be a lot, as all are charging about the same.  If there was any room, one of them would undercut the others to get ALL the business.

Perminate Link for Would Life Be Grim without Postal Shipping?   Would Life Be Grim without Postal Shipping?

by: Whatever This user has validated their user name.

Tue Jun 25 15:02:08 2019

I'm blessed to live in a tourist revenue generated city. It would mean I'd have to go back to a real job - you know where you get dressed every stinking day - go unlock the door - pay all the bills and rent and license fees - ugh - hope they keep shipping

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