Ina Steiner EcommerceBytes Blog
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by Ina Steiner, Editor of EcommerceBytes.com
Fri Sept 5 2014 08:19:05

FedEx and UPS Howl as USPS Lowers Priority Mail Rates

By: Ina Steiner

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The Wall Street Journal picked up on our story about UPS and FedEx concerns over the Priority Mail rate changes that take place next week. The USPS is raising rates for Priority Mail when purchased at the Post Office, but is lowering rates for those who purchase Priority Mail postage online (commercial pricing).

As we wrote last month, UPS contends that the Postal Service is trying to squeeze revenue from market dominant mailers while increasing its competitive market share, and both UPS and FedEx question the Postal Service's costs for competitive products that it shared with the Postal Regulatory Commission.

Stamps.com Eric Nash told us that with the September rate changes, "the USPS is going aggressively after the ground business from UPS/FedEx Ground." The rates take effect as of September 7, 2014.

It's no surprise the move is getting major attention from the Wall Street Journal - the newspaper states, "both UPS and FedEx say the agency is taking advantage of its status as a near monopoly to unfairly snag a bigger piece of the e-commerce pie" - definitely worth a read.




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Readers Comments

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: sasikat9 This user has validated their user name.

Fri Sep 5 10:13:25 2014

The USPS will have to do a lot better than they are now in order to get our 100 packages a week.

As it is now the USPS does sloppy work as far as scanning and delivering to the correct address.

Thanks but no thanks we will stick with our polite UPS guy. He is a saint unlike the overweight slob who just tosses the packages everywhere.

The post office has no one to blame but themselves for their lack of business.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

This user has validated their user name. by: laurengrace

Fri Sep 5 10:37:23 2014

I am now and will remain with the postal service for most of my items are lightweight,and the change in the prices for heavier items are now worth looking at again. The lowest price wins.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

This user has validated their user name. by: Rexford

Fri Sep 5 11:02:35 2014

Love it!  Let them howl!

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: Patricia This user has validated their user name.

Fri Sep 5 12:17:19 2014

I wish USPS would sell ALL postage online!  Knock out stamps.com and the others.  USPS should be making this money themselves.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

This user has validated their user name. by: laurengrace

Fri Sep 5 13:23:22 2014

@Patrica, The USPS does sell postage onlnr through stamps.com, endicia,etc. Their own (USPS) postage site leaves a lot to be desired.  

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: Xander This user has validated their user name.

Fri Sep 5 13:45:15 2014

Anything that makes UPS and FedEx complain is alright by me.

These two companies have been raising their rates every single year since the beginning of time. Even during times of economic hardship, they never had a rate increase they didn't like.

Below are a few of UPS's 2014 add on fees.

Residential delivery-$2.90 & up
Address correction- $12.35 Even if the driver knows the correct address, they bill.
Delivery area surcharge, residential- between $2.85-$3.40
Extended delivery area surcharge, (more rural) residential- between $3.62-$3.65
Saturday delivery- $16.00

The above fees are per parcel, multiple parcels equals multiple fees.

On top of these fees, they add in a fuel surcharge fee which is 7.5% for ground and 10.5% for air.

Then they have a 6% fee for invoices paid after their short due date. UPS bills weekly so you're always writing checks. Those who are used to paying bills once or twice a month can find themselves paying a few of these 6% late fees from time to time.

UPS is making money hand over fist and I'm sure Fed Ex isn't far behind.

USPS doesn't have any of the fees on the above list, Zero!

For those who sell on line, most of your orders will be residential and many will be rural also.

It's good to see the postal service make a grab at part of UPS/Fed Ex's parcel business. I'm all for it and will continue to support them.

Hopefully they can handle the increase as others have mentioned, they really could improve with more accurate scanning and delivery.

We once used UPS exclusively but no longer see a reason to pay all the additional fee's.

I'll take the delivery times of priority mail verses UPS ground any day, especially coast to coast.

I have no problem with those who use UPS/Fed Ex. For those who can make it work for them, great!  

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: Xander This user has validated their user name.

Fri Sep 5 13:49:49 2014

''Their own (USPS) postage site leaves a lot to be desired.''  

I agree. We use stamps.com which is very easy to navigate and worth the $15.99 monthly fee. Click and ship is like ebay where they are always re-formatting the sites layout. Once you get used to it, they move things around again and it is buggy.

Stamps and Endicia are both good choices.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: Donkey This user has validated their user name.

Fri Sep 5 16:27:24 2014

Perhaps UPS should add another surcharge to their list for people that have used the Post office.

This is in additional to the UPS surcharge for delivery to a residence, fuel surcharge, it's a Tuesday surcharge, etc.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

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

Sun Sep 7 04:41:48 2014

In using UPS : putting a "Fragile" label on a box ques them to beat the living tar out of it. I once saw a UPS employee stand at the edge of the catwalk with a box containing electronics OVER HIS HEAD and force drop it straight down 10 feet to the cement floor below. Then he stood there and laughed, 'til he saw Me.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: Patricia This user has validated their user name.

Sun Sep 7 11:12:07 2014

@ laurengrace  I think you misunderstood me.  I see no reason why we can't buy ALL types of postage on the USPS site.  Why we pay high monthly fees to Stamps.com, etc.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: Santini This user has validated their user name.

Sun Sep 7 11:40:42 2014

"In using UPS : putting a "Fragile" label on a box ques them to beat the living tar out of it"
True, but then some customers expect their shipments, UPS/USPS, etc. to be marked "Fragile" and are not happy otherwise...classic catch-22!

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

This user has validated their user name. by: Island_Sam

Sun Sep 7 11:45:37 2014

We are neutral on this issue. We NEVER use UPS or Fedex.. Too expensive

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

This user has validated their user name. by: laurengrace

Sun Sep 7 15:55:56 2014

@Patricia, I understand what you mean. I am not crazy about having to pay the fees for stamps.com either but at least they simplify it for us. With usps, you have to enter each line individually and it takes too much time. Yes, you should be able to do that on USPS site but their site is very cumbersome.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: Charlie B This user has validated their user name.

Sun Sep 7 21:23:30 2014

Lately, USPS has benefited from good press on competing with UPS/FedEx on certain rates BUT they RAISED rates on First Class, 1 pound packages, Regional Rate A, and Flat Rate.

Just finished printing postage and I was shocked at the increase. For instance, we normally pay $1.93 for a 3 ounce package, First Class. As of today (Sept. 7th), the price increased to $2.32 -- an increase of $.039 or a whopping 20%. 20% increase! Sheesh! Didn't they just raise the postal rates in January? If so, are we to expect two price increases a year? Sounds like a page out of eBay's book.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: Charlie B This user has validated their user name.

Sun Sep 7 21:33:35 2014

Just a follow up. I checked our shipping records and in 2013 we paid $1.69 for a 3 ounce package. In January 2014, USPS raised the rate to $1.93, and as of today they've raised the rate again to $2.32 ($.063 in total or 37%). Now I remember why I hate the US Postal Service :(

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: macsbaby This user has validated their user name.

Sun Sep 7 23:09:46 2014

If the USPS had the insurance claim practices of FedEx and UPS they probably could even out their budget. FedEx and UPS do not pay claims....at least not over 200 usd. They have standard 3x denial....then you have to meet their absurd list of packaging requirements, and have to prove it. I asked them what they covered....after being denied on an obvious mishandling claim....they stated "paper".

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

This user has validated their user name. by: elpereles
Web Site

Mon Sep 8 01:35:04 2014

The USPS before starting the war with UPS and Fedex forgot at least the most important weapon. Making a 100% working free of glitches site to buy the online postage.

Last week tried to buy some postage online in the USPS. I was getting errors for Domestic and International postage.  

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: donald This user has validated their user name.

Mon Sep 8 01:49:14 2014




well I hope USPS makes UPS run for their money (like they are not running already). FedEx is alright but like Xander said, they also nickel and dime you to the horrific max...


Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: GameItWorks This user has validated their user name.
Web Site

Mon Sep 8 05:13:34 2014

The USPS Priority Mail is unreliable for shipping anything of value that you need a signature upon or online confirmation, and their insurance policy requires a receipt and proof of market value for an a product rather than the sales price.  A big disadvantage if you sell vintage products.

I switched over entirely to FedEx for any sales that I need to receive a signature for or confirmation for, since the USPS has failed at least three times this year on my shipping to obtain a signature or provide confirmation of delivery.

Also, some of the postal service supervisor who handles complaints for my city was completely unhelpful for resolving such issues.  One case I was told to call the New York Postal Service from Los Angeles area and deal with them.   That was unacceptable considering I paid the local USPS for Priority Shipping and extra for Signature Confirmation.

Their supervisors if you can get them to contact the ship to branch location are pretty much limited as well, since its the ship to location that fails to collect the signature or confirmation.   Usually the ship to location has no record of the package even going through their location since no confirmation or signature or updates were made into their system.

The only recourse is to file a lost package for the complete amount - which often ends up getting denied if they contact the buyer who received the package.

The point is that for expensive products and some insurances or market venues, you are required to have that signature and confirmation to protect yourself against claims.

FedEx has never failed me in this area and their Ground/Home service is faster generally speaking.

As for USPS, they raised their prices and are no longer competitive with FedEx or USPS.

Perminate Link for FedEx and UPS Howl as USPS Lowers Priority Mail Rates   FedEx and UPS Howl as USPS Lowers Priority Mail Rates

by: julie This user has validated their user name.

Mon Sep 8 05:16:56 2014

At first I was excited about the lowering of Priority Mail... but now I am not, not at all. :( First of all, most of the time I use UPS for med/heavy packages heading out west. The reduced Priority Mail is only for zones 1-5. So this will really not help our business. UPS will still be less expensive, most of the time, to zones 6-8.

And then I realized that 1-3 oz First Class Parcel went from $1.93 to $2.32. 4 oz was $2.01, now $2.50. So what little I will be saving on Priority Mail going to zones 1-5 will be quickly eaten up by the First Class increases, so we won't be saving at all in the end. In fact, I think we will end up paying more in postage! (80% of our packages ship First Class.)

Pretty slick for USPS to tout their ''lowered rates'' with no mention of ''Oh, you'll pay more for First Class''. :(

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