The U.S. Postal Service has revised prices for its Shipping Services. The rate changes went into effect on Jan. 17, 2016 and are the first price increase in more than three years for commercial Priority Mail.
In 2015, UPS and FedEx boosted shipping rates for many customers — including small businesses.
Pitney Bowes, a supplier of global eCommerce solutions and shipping and mailing products, believes the changes mean small business shippers must begin thinking in new ways.
“The one guiding principle that all small businesses should observe for their sending is to look at the data to select the best carrier mix,” Jeff Crouse, Vice President at Pitney Bowes told Small Business Trends in an email interview. “By analyzing their data on delivery performance and cost, they can ensure the right packages are sent via the right carrier.”
“Taking a multi-carrier approach allows even small businesses to maximize their shipping dollars while meeting their specific delivery requirements,” he added. “Don’t fall into the trap of using one carrier for all parcels. Each carrier has its strengths and playing to those strengths will allow small businesses to win big.”
Notably, the price changes do not affect First-Class Mail or any other Postal Service Mailing product such as the Forever stamp.
Price Increases at a Glance
Following is a summary of some of the increases likely to affect small businesses.
- Overall, the Priority Mail Express service will see a 15.6 percent price increase.
- The average retail price of Priority Mail Express will be increased by 14.4 percent.
- The Priority Mail Express Flat Rate Box will be discontinued because of low volumes.
- Overall, First-Class Package Service prices will be raised by 12.8 percent.
- Standard Post will be renamed Retail Ground, and prices will go up by 10 percent.
- International shipping prices will increase as well with Global Express Guaranteed (GXG) and Priority Mail Express International (PMEI) being raised by 7.1 percent and 11.6 percent, respectively.
More information on the price hike can be found at the Postal Regulatory Commission website (PDF).
Concerns to Consider for Small Business
In addition to this, Pitney Bowes noted significant increases at the other big carriers in recent years that might also be of concern.
- On Dec. 28, for example, UPS Ground Services saw a 4.9 percent hike while UPS Air and International Service went up 5.2 percent
- Also, on Jan. 4, FedEx implemented a 4.9 percent increase and its new “dimensional weight” pricing model which in many cases also translated to higher costs.
- Meanwhile, FedEx also raised its Home Delivery service from $2.85 to $3.00 and Ground Home Delivery from $2.90 to $3.10.
Crouse suggested several important changes to make in your business’s shipping strategy to compensate.
“First, match your shipping strategy specific to your customer and business needs,” he suggested. “That way, you can select the right carrier for each parcel based on a host of factors, including delivery requirement, cost and value. In other words, don’t put all of your eggs in one basket.”
Second, Crouse suggested small businesses must leverage technology.
“There are new cloud-based sending solutions coming to market that are scaled specifically for small businesses to help simplify their shipping operations and gain greater control and visibility into their true cost of sending,” he said.
“My third recommendation is to eliminate wasted space,” Crouse added. “Carriers use Dimensional Weight Rating on parcels, which can have a dramatic effect on the shipping cost. Outer packaging should consist only of what is necessary to properly secure the enclosed items and provide protection during transport. Don’t ship small items in a big box or you will overpay big time!”
The company has also put together a video overview of changes in the new USPS shipping prices:
Other companies working with small businesses have also weighed in.
In a recent post on its website, eBay told merchants:
“We fully understand the impact changes like these can have on your business. Rest assured that we will continue to work directly with the USPS — and all our shipping providers — to keep shipping rates low. In the past, we’ve been able to leverage the shipping volume eBay sellers generate to secure great discounted rates.”
U.S. Postal Service Photo via Shutterstock