United States Postal Service Rate Increases Coming January 17, 2016 At 12:01 AM
The USPS price increases in 2016 are going to be significant, and there will be some restructuring of their pricing levels. As online sellers that ship our own products this will have a heavy impact on all of us. In this post I am only covering some of the changes, mainly the services used most by online retailers, and the ones we use the most. You can read the whole Document Notice here: https://www.prc.gov/docs/93/93564/Notice%20CP2016-9.pdf . Further down in the Notice after covering the increase amounts, pricing tables can be found if you want a broader picture of what is happening.
USPS has always had 3 pricing levels including Retail, Commercial Base, and Commercial Plus. With the 2016 price increases they are increasing Commercial Plus prices to within 3% of Commercial Base prices with the long term goal being to combine the two by 2017 so there will be only one Commercial pricing level.
Before we get started listing the increases below here is how the different pricing levels work: Retail price is what you will pay at the counter inside the Post Office, Commercial Base price is what you would usually pay online at USPS.com if you have an account there(First Class services can Not be purchased at usps.com), and Commercial Plus is what you are paying using PayPal labels, Etsy labels, eBay labels, etc. As an example, we print our labels through PayPal, Etsy, or eBay depending on where the item sold, so we get the commercial plus pricing.
To use the PayPal label service you can go to https://www.paypal.com/shipnow . You will have to sign into your PayPal account but you can use this service to ship First Class Package through Express Mail services and receive Commercial Plus pricing. I added this link because a lot of people do not know you can print shipping labels through PayPal even if the item was not purchased using PayPal, you can use their label printing for any package you want to send.
Now, let’s get into what these USPS price increases look like and how it will affect you and us as online sellers:
Domestic Service USPS Price Increases
Priority Mail Express services increases:
- Priority Mail Express Flat Rate Box is being eliminated
- Retail price average increase will be 14.4%
- Commercial base average increase will be 17.7%, commercial base products will be set at a flat 10% off retail prices
- Commercial Plus overall increase will be 48.2%, this large increase is due to the goal of combining base and plus by 2017
Priority Mail retail price increases:
- Average 8.6% increase
- Flat Rate Envelope from $5.75 to $6.45
- Flat Rate Padded Envelope from $6.10 to $6.80
- Small Flat Rate from $5.95 to $6.80
- Medium Flat Rate from $12.65 to $13.45
- Large Flat Rate from $17.90 to $18.75
- Large APO/FPO/DPO from $15.90 to $16.75
- Regional Rate box A depending on zone has increased to between $8.26-15.95
- Regional Rate box B depending on zone has increased to between $8.96-25.41
- Regional Rate box C has been eliminated across the board
- Priority Mail commercial base average increase will be 9.4%, prices will be set at 13.9% off of retail prices.
- Priority Mail commercial plus will be increased as a whole 13.3% to bring prices to within 3% of commercial base prices, long term goal is to combine base and plus in 2017.
Since we don’t use parcel select services all I can list for you are the percentage increases across the available services.
Parcel Select Services retail price increases:
- Non lightweight services increase 3.1%
- Destination entered parcels average increase 4.9%
- Non destination entered parcels average increase 1.9%
- Parcel Select Lightweight increase 23.5%
- Parcel Select Non-presort will be renamed Parcel Select Ground and increase 1.9%
We have stopped using First Class Package Services because of such long delivery times, and lack of scanning and tracking. First Class Package Services retail and Commercial Base used to only include anything under 13 ounces, Commercial Plus was anything under 1 pound(15.999 ounces).
First Class Package price increases:
- First Class Package Service overall increase 12.8%
- Commercial Base and Commercial Plus are being combined, so now all commercial customers will receive First Class Package Service under 1 pound(15.999 ounces).
Standard Post will be renamed Retail Ground and increase 10%
International Service USPS Price Increases
International Expedited services:
- Global Express Guaranteed (GXG) will rise by 7.1%
- Priority Mail Express International (PMEI) overall increase 11.6%
- Commercial Base and Commercial Plus prices will be equivalent
Priority Mail International price increases:
- Overall increase for Priority Mail International (PMI) will be 10.2%.
First Class Package International overall price increase will be 21.6%. Commercial Base and Commercial Plus pricing will be equivalent. This is a very large increase and will hurt us deeply.
There are some exceptions to the combining of Commercial Base and Commercial Plus pricing differences depending on contracts between USPS and some of their larger customers. All information contained in this article was found in the official document filing, if you would like a more detailed breakdown of all these increases, and the exceptions, please visit the official document here: https://www.prc.gov/docs/93/93564/Notice%20CP2016-9.pdf
As you can see from what I posted above these USPS price increases are going to affect anyone who ships their own packages, whether online sales or retail store sales. This is a major blow to us all so I wrote this post in hopes of helping everyone to start planning now for what’s coming in the middle of January 2016.