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USPS rates to increase in 2014

November 15, 2013 Written by NetSphere Category: Shipping & Fulfillment
USPS rates to increase in 2014
As the USPS announcement to partner with Amazon to offer Sunday deliveries made headlines, two additional news items flew below the general public’s radar. The first was in regard to major revenue losses for the 2013 fiscal year – the seventh year running.
 
“The U.S. Postal Service ended the 2013 fiscal year (Oct. 1, 2012 – Sept. 30, 2013) with a net loss of $5 billion,” explained a press release found on the USPS newsroom website. “This marks the 7th consecutive year in which the Postal Service incurred a net loss, highlighting the need to continue to capitalize on growth opportunities, reduce costs, and enact comprehensive legislation to provide a long-term solution to the agency’s financial challenges.”
 
The second piece of underlying news from the USPS seems to address some of the agency’s difficulties, but it could affect retail businesses in the long run. That news includes a 2.4 percent price increase for postal service shipping services in 2014. According to an article published by Post & Parcel, a news outlet covering the global mail and express community, the price increase will go into affect on Jan. 26, 2014, and will be above the 1.6 percent level of inflation in the United States.
 
“Priority Mail Express services will see rates go up by 3% on average, Parcel Select rates will increase by 5.9%, and First Class Package rates will increase by 5%,” Post & Parcel reported.
 
The Post & Parcel continued its report by highlighting the expected changes for Express, Parcel and International shipping. For retailers, some of those highlights are of particular interest, including:
  • For the First Class Package Service, used by businesses in product fulfillment, prices will increase by 5 percent.
  • Commercial customers will see a 2.9 percent rate increase for Priority Mail Express, but high-volume commercial customers classed as Commercial Plus mailers will see only a 0.6 percent rate increase.
  • For the USPS bulk ground shipping service, Parcel Select, prices will increase by 5.9 percent on average. This will include an 8 percent price increase for parcels dropped off at local delivery units for final mile delivery, or a 5.6 percent price increase for parcels dropped off at a destination plant, while prices for parcels dropped off at network distribution centres will rise by 5.1 percent.

Despite the announced increases, the USPS does plan to retain some of its current pricing. The agency said that, for the majority, flat-rate Priority Mail rates won’t change. It also stressed that the overall value of USPS services continues to be unmatched.

“The Postal Service remains the best in value in the shipping business,” said Nagisa Manabe, the chief marketing and sales officer for USPS. “We continue to offer excellent domestic Flat Rate shipping with a price that doesn’t vary by destination.”

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Abbe Miller is the marketing manager at NetSphere Strategies, located just outside Chicago. NetSphere Strategies is a boutique eCommerce company positioned to help businesses transform their online presence by providing a full complement of services that starts with our strategic consulting and creative design teams, then continues with building innovative solutions and providing ongoing post-project support.