Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Aug 18 2013 19:41:46

Will USPS Future Plans for Priority Mail Result in Higher Rates?

By: Ina Steiner

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Expect to see television ads promoting the USPS Priority Mail service beginning this week. I was privy to a conference call with journalists hosted by U.S. Postmaster General Patrick R. Donahoe and Chief Marketing and Sales Officer Nagisa Manabe who were trying to spread the word to both consumers and small businesses about the attractions of using Priority Mail to ship packages.

The USPS recently rolled out changes to Priority Mail, including rebranded Express Mail to "Priority Mail Express."

The USPS also added an estimated delivery time designation on shipping labels and in the USPS Tracking information - clearly they believe eBay's philosophy in providing estimated delivery dates to customers - see Monday's Newsflash article for more information.

Donahoe and Manabe called Priority Mail's recent "brand refresh" a bright spot for the organization. As Kenneth Corbin noted in Newsflash recently, USPS shipping and package revenue spiked 8.8 percent for the most recent quarter, and Donahoe and Manabe said ecommerce was a major driver in that growth.

While there were no real surprises in the presentation, in a post-call followup, I did learn something extremely interesting. A spokesperson said future plans include moving to a guaranteed service for day-specific delivery.

Right now, only Priority Mail Express (the former Express Mail service) is guaranteed delivery - the other dates (1 Day, 2 Day and 3 Day), which the duo referred to as day-specific delivery, are estimates based on the package's departure and ship-to location - in other words, customers cannot request 1 Day, 2 Day or 3 Day Priority Mail.

The USPS has flexibility to make changes to services and rates to what are called "competitive" offerings, under which Priority Mail falls. Eyeing carriers such as UPS and FedEx, apparently the USPS believes it can further improve Priority Mail (and improve its bottom line) by guaranteeing delivery dates. But would a hypothetical increase in package volume as a result of such a change be enough to satisfy the desire to boost postal revenue?

I'm curious about how online sellers who rely on Priority Mail feel about such a change. I would think if the USPS could meet those delivery times, guaranteed delivery would be a plus - but would it come with a rate increase? Let us know what you think!




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This user has validated their user name. by: windsorbear

Sun Aug 18 23:17:40 2013

It can't hurt.  I shipped out a Priority Mail package on 08/06.  It printed out as a 2-Day deal.  Here it is 12 days later, and the package has still not arrived.  Didn't have far to go either... from Virginia to Florida.  Postal service has been of little help other than telling me it has not arrived yet.  Yes, I already know this.  It left the Tampa sorting facility on 08/08 on its way to Sarasota, and never arrived.  Can I put a trace on this or report it as lost?  Sorry sir, you must wait at least 21 days to report the package.  Oh really... it says it is a 2-Day Priority Mail package, but I must give the postal service at least 21 days to get it there before I can file a report on it?  Yes sir.  Ooookayyyyy.

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by: Ed This user has validated their user name.

Sun Aug 18 23:19:16 2013

Great News now every seller that has Free Shipping will have to revise every listing they have to cover the new postal rates plus the the ebay and PayPal fees attached to the items you will be shipping. Don't worry its just the cost of doing business.

If you don't have free shipping look forward to receiving more 1's on your DSR because shipping cost is not very reasonable.
Happy Holidays  

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This user has validated their user name. by: Ric

Sun Aug 18 23:19:57 2013

Enough is enough. We just had a Priority Mail rate increase.

Included insurance and guaranteed delivery dates are nice, but the bottom line is cost of service.

The majority of our packages do not warrant insurance, and we have no need for guaranteed delivery dates.

USPS may cross the line and end up losing much of the gains their service has realized if they decide to increase rates yet again.

If Priority Mail Rates increase any higher, we will likely move our Priority Mail business to either FedEx or UPS.

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by: comet This user has validated their user name.

Mon Aug 19 00:07:36 2013

I rarely use Pri Mail any more--most people are HAPPY to spend LESS for their packages to go---- whatever name the PO is calling whatever WAS Pri Mail last week!

This endless shell game the PO is playing is insulting to the public and should be STOPPED.

We ask--and PAY--them to do ONE THING--get the mail to where it needs to go in a reasonable time.

Is that TOO MUCH TO ASK?  Or do we really NEED all this silly "rebranding" and false promises of "Date specific delivery"--esp if in fact  they CAN'T get it to where it needs to go?  

Oh wait---there IS a Donahoe at the head of this table is there not??

Well THAT 'splains everything!

I have had too many issues of the PO not getting things there NOW---can I really be asked to pay MORE for LESS????

Again??????

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This user has validated their user name. by: Ming the Merciless

Mon Aug 19 00:35:01 2013

Insured 1st Class Mail with free delivery confirmation is another option

Of course, we must remember that former President Bush signed the law not only requiring the Postal Service to fund employee health and retirement benefits 70+ years into the future, but also requiring ANNUAL rate increases.

Theoretically the problem is easy to solve. However, since one of the Republican/Tea Party/Libertarian goals is to destroy all public employee associations and unions and to privatize as many governmental and quasi government services, it will take a major uprising of "noise" directed at the House of Representatives to achieve postal rate abatements.

What I think might cause P. Ho to change is mind is filing for postage refunds each time a Priority package isn't delivered on the promised date like the Express Mail guarantee is now.

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by: Steevo This user has validated their user name.

Mon Aug 19 01:02:51 2013

Ya know, everything has a cost.

Customers want fast free shipping, end to end tracking, careful packing in all new materials, as well as the expected very cheap prices.

Clearly what this means is customers want everything shipped FedEx Express Overnight.  A premium service at a premium price. They're just not willing to pay for it!

Some ebay sellers have said here that they can't do it, their item price is not enough to support that.  

Guess what?  That's the problem. Ebay is trying to fix it.

Some sellers are trying to sell $5-$10-$20 items on ebay.  You can't do it!  You can't afford to pack, ship, pay ebay their VIG, and be completely responsible for what happens, even the performance of a shipping company.

You'll be able to see it in your DSRs and if you or the shipping company screws up, well, Paypal will hold your money for 21 days until you ''improve.''  For a year!  

Well, guess what?  As long as you pay FedEx for Express Overnight, they will indeed be responsible for that package and it's on-time delivery!  

The problem is we sellers are now expected to be responsible for things we are not in control of.  

This is the age old problem with ebay.  Prices too low. Sales cycle too long. Sales too slow. Customer demands/service standards too high.

The solution is to use a real shipping company, charge for it, and sell more expensive items.  

Ebay is obviously trying to get rid of the cheap stuff, the noisy sellers who complain about them setting service standards that are expensive to meet.

Well, they are expensive to meet if you are selling very cheap stuff.  

The handwriting is on the wall. Don't sell any postage stamps that are worth less than $20. Make the customers pay for the service they want.  

If you ask me, ebay should allow a lower service standard on cheaper items with an optional expedited service, and there should be a very clear differentiation between them, so the customer must choose how much they want to pay.

If the customer chooses the cheap method of fulfillment the shipment should be prepared and shipped in three days.  Even if you have nothing to do you should not ship before the appointed time the customer is paying for.

One day shipping should be a choice with a visible cost.  Customers should be made aware of the service standards and the costs of those services.

Course ebay doesn't really care, they want you to ship the same day for free.  That is not reasonable.  But it's easy to see why that's what ebay wants, it doesn't cost them a cent.  They pushed those business costs off on us.  I just want everyone to recognize that businesses have costs and they must be paid by someone, preferably the customer.  

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This user has validated their user name. by: Basset

Mon Aug 19 07:44:02 2013

Odd, for years I've used Priority & First Class.

For years, I've received many comments from customers thanking me for the fast shipping. I give credit to USPS. So what is different in their service now than the past several years?

Price is higher, yes, but their service is still what it always has been - IMO, pretty decent! I've seen packages go from one side of the USA to the other side in one day at regular Priority shipping. This sudden need for speed seems like a contrived sales pitch.

Recently stocked up on Priority Boxes. Lots of new sizes and new artwork on the outside. Maybe if the box looks different we'll think the service is different?

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by: Will This user has validated their user name.

Mon Aug 19 08:30:04 2013

Absolutely this will increase rates.

I don't mind, but they'd better dial up the service too.

It's called being accountable.

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by: FREDDY This user has validated their user name.

Mon Aug 19 09:22:12 2013

Of course it will mean higher postal rates.  The only way a ''guarantee'' is to work is to have money back or equal. Therefore, higher rates to offset the refunds that will have to be given.
USPS has to increase dollars by either a rate increase or quantity increase. This move, in their eyes,  will do both. I am sure it never occurred to them that anyone would opt for fed ex  for shipping and leave USPS except for standard mail.

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by: Bethofvt This user has validated their user name.

Mon Aug 19 09:26:14 2013

I ship 90% of my items Priority Mail.  It is extremely rare when one does not arrive in 3 days, and most often tracking will show it was misdirected to a wrong post office when that happens. Or it is lost.

I love the FREE boxes. And more sizes are available all the time. Just wish they would let me use the Regional B box at regular shipping rates. it is probably the most useful size box they offer, but for anything under 4 pounds, it is not cost effective.

Free added insurance was a nice surprise last month.

Charging more than double for a Priority box slightly over 1 cubic foot is stupid, they don't discount when it is well Under 1 cubic foot.  So that is where they lose my business to UPS, packages over 1 cubic foot going further than 250 miles go to the UPS office, but other than that, I am quite pleased with my service from USPS.  

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This user has validated their user name. by: Rexford

Mon Aug 19 10:14:18 2013

Of course rates will increase.  What infuriates me is that when packaging prices increase, the only thing that our esteemed national media report is the 1 or 2 cents stamp increase.

Now that eBay has branded "free shipping" onto customers' brains it is either margins or DSRs that will drop like a rock.  Since "cantseeme" search was implemented, sales have dropped like a rock, so is it even worth it anymore?  No, which is why we are building our own site.

How does one say eBay in Mandarin Chinese?  Those Donahoes sure know how to run a company----------into the ground.

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by: racecarguy This user has validated their user name.

Mon Aug 19 10:22:30 2013

@Bethofvt,

I agree, the Regional Boxes (in several sizes) should be made ''regular'' boxes. There are many that are a very useful size, but definitely NOT a better PRICE. (The Flat Rate and Regional plans are nothing but a Money Grab. What a rip-off of the public the Flat Rate service is!)

I am generally very satisfied with USPS delivery, but why not make the other size boxes available for normal use?

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by: Patricia This user has validated their user name.

Mon Aug 19 10:59:48 2013

Priority mail in the US is not all that bad...but try shipping first class international.  The last package I shipped out to the UK was only 2 ounces but cost me $10.75!!!  I no longer offer international mailing unless the buyer specifically requests it and knows the costs.  I imagine this has lost them a LOT of business.

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by: Patricia This user has validated their user name.

Mon Aug 19 11:01:48 2013

@racecarguy - I disagree with you on the flat rate boxes.  I regulary ship out self-published pattern booklets to my distributer and use medium size flat rate boxes.  The weight is sometimes over 10 lbs and still only costs $11.35.

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by: racecarguy This user has validated their user name.

Mon Aug 19 11:19:51 2013

@Patricia,

You have found one of the very few things (along with horseshoes and anvils) that actually benefit from the Flat Rate.

We ship toys and diecast and nothing is cheaper that way.
I wish it was.

I do agree with you on International shipping. We lost a ton of overseas business with the most recent rate hike. Prices doubled (!!) . That will definitely kill some business.

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by: Sierra This user has validated their user name.

Mon Aug 19 11:24:39 2013

Patricia, 2 ounces shipped First Class International to ANY country outside of the U.S. is $6.55 (and less than that if you buy your postage online). So you really should figure out how/where you were overcharged so this doesn't happen again! And then file a claim to get the overpaid postage back.

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by: Sierra This user has validated their user name.

Mon Aug 19 11:33:48 2013

As for boxes you can use for any type of shipping, Walmart has 14x14x14 and 12x12x12 boxes for about 68 cents each; I bought some of each size yesterday! BTW, these are California prices, so they may be less elsewhere. Sure, you can get boxes for even cheaper,  but you'll probably need to buy at least 25 per size.

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by: Patricia This user has validated their user name.

Mon Aug 19 12:03:57 2013

@Sierra - I did question the 10.75 at the time and was told because the envelope was stiff (it was a miniature painting that I protected between two sheets of cardboard.  The price came to 10.75.  I had already charged the buyer 7.00 so I had to eat the rest!

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by: Xander This user has validated their user name.

Mon Aug 19 13:15:52 2013

Shipping has always been a point of contention especially when rates have a stout increase as USPS international has this past few years.

With retail buyers interest in free shipping and the ever increasing cost to deliver products worldwide, merchants shipping costs will continue to be a critical aspect of business.

Everyone knows the USPS is in trouble but mainly because of the 70 year prefunding issue. If that was fixed they could focus on moving letters and packages profitably.

It does appear the USPS is trying to repair something which is not broken by the re-branding and all. Most volume users know all the shipping options and where the shipping value applies to their products so changing the names and artwork then pushing the product does little to help increase it's use.

I'd bet adding a delivery guarantee will cost them dearly providing the afflicted users are willing to go through the process of collecting on late deliveries.

We did it once on an express shipment to AU and it was a royal pain, had to all be done by mail and took around 45+ days to get reimbursement. If their new guaranteed process is anything like that, this offer would than be nothing more than an exercise in user patience and might lead to more problems between the buyer and seller if buyers think they are entitled to a shipping refund.

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by: AgendaSwallowsAll This user has validated their user name.

Mon Aug 19 13:36:39 2013

The identical brand of inept management and/or the same IT dept. handling ebay has infested the USPS. Rather than writing a book, this is the only example that is needed. It has been almost a year since the USPS introduced their ''New & Improved, more user friendly'' website that as is the case with ebay is anything but. When processing an international package in USPS Click n Ship there is a ''Return to Sender'' or ''Treat as Abandoned'' option, after almost a year and multiple advisories re: their having ''Fees may Apply'' by the ''Treat as Abandoned'' option rather than by ''Return to Sender'' as it should be, they have done nothing.

I don't know if it's Arrogance, Ignorance, Blind-Sighted Agenda or a combination of the 3 that has these entities not understanding a simple concept ''If it ain't broke, don't fix it'' but oddly enough they don't get the concept at all.

Memo to ebay, the USPS and others. The intelligent simply aren't in that much of a hurry, they plan ahead or they purchase locally if in that much of a hurry. Cease listening to 2-4 percent, possibly 10 percent at best who receive surveys that read ''Would you rather have your package in 1 day or 7'' with their checking the ''1 day'' box and then thinking that's a feeling of entitlement held by the masses.

It's just an enigma

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