​Title: USPS Shifts Gear: From First Class Shipping to Ground Advantage

Introduction

The United States Postal Service (USPS) has been a cornerstone of American communication and commerce for over two centuries. In recent years, the USPS has undergone significant changes to adapt to the evolving needs of its customers and the challenges of the digital age. One of the notable shifts in USPS service is the transition from a reliance on First Class shipping to a focus on Ground Advantage. In this blog post, we will explore this transformation and its implications for USPS and its customers.

The Transition to Ground Advantage

In the past, First Class mail was the gold standard for USPS. It offered relatively speedy delivery at a premium price. However, as technology and e-commerce have become increasingly prevalent, the USPS has had to reevaluate its services and pricing to remain competitive and relevant in the modern marketplace. This has led to the USPS placing greater emphasis on its Ground Advantage service.

Ground Advantage represents a more cost-effective and efficient shipping option. It leverages the USPS's extensive ground network, which already serves every corner of the United States. By optimizing this network for package delivery, USPS can provide competitive pricing and reliable service for e-commerce businesses and individual customers.

Benefits of Ground Advantage

1. Cost-Effective Shipping: One of the primary advantages of Ground Advantage is its affordability. Customers can send packages and parcels at a fraction of the cost of traditional First Class shipping, making it an attractive choice for cost-conscious businesses and consumers.

2. Reliability: With Ground Advantage, USPS has improved its delivery times and reliability, making it a more attractive option for e-commerce businesses and consumers who value on-time deliveries.

3. Extended Service Area: USPS's vast ground network ensures that Ground Advantage can reach even the most remote areas of the country, making it an excellent choice for businesses looking to expand their customer base.

4. Environmental Considerations: Ground transportation typically has a lower environmental impact compared to air travel, aligning with USPS's efforts to reduce its carbon footprint and support sustainable shipping options.

Challenges and Considerations

While Ground Advantage offers numerous benefits, it's essential to be aware of potential limitations and challenges:

1. Longer Delivery Times: Ground Advantage may not be as fast as First Class shipping, which is still the best option for time-sensitive documents and smaller items.

2. Competitive Pressure: Other shipping carriers, such as UPS and FedEx, also offer ground services. USPS's Ground Advantage competes in a crowded field, and the market dynamics can affect pricing and service quality.

3. Size and Weight Limitations: Ground Advantage may not be the best choice for very heavy or oversized items, which may incur higher costs or longer delivery times.

Conclusion

The United States Postal Service's transition from a reliance on First Class shipping to Ground Advantage is a significant shift that reflects the evolving landscape of mail and package delivery services. Ground Advantage offers cost-effective, reliable, and sustainable shipping options, making it a compelling choice for businesses and consumers alike.

As the USPS continues to adapt to changing customer needs and market conditions, it will be interesting to see how Ground Advantage and other innovations contribute to the continued success of this essential national institution. Whether you're a business owner looking for affordable shipping solutions or a consumer seeking reliable delivery, USPS's Ground Advantage is a development worth considering in the evolving world of mail and package delivery.

Using USPS consolidators in an expensive shipping market can make sense for several reasons:

1. Cost Savings: USPS consolidators can provide significant cost savings compared to direct USPS shipping or other shipping carriers. They aggregate multiple packages from various businesses and individuals and send them in bulk to USPS facilities. By consolidating shipments, they can negotiate discounted rates with USPS, which are often lower than standard retail rates. These cost savings can be particularly beneficial in an expensive shipping market where rates are generally high.

2. Enhanced Delivery Options: USPS consolidators can offer additional delivery options that may not be available through direct USPS shipping. For example, they may provide expedited shipping services or access to USPS international shipping options that are typically more expensive when shipped directly. This can give businesses and individuals more flexibility in choosing the most cost-effective and efficient delivery method.

3. Streamlined Operations: USPS consolidators handle the logistics of collecting, sorting, and preparing packages for shipment, which can save businesses valuable time and resources. Instead of managing individual shipments, businesses can consolidate their packages and hand them over to the consolidator, simplifying their shipping processes. This streamlined approach can be especially advantageous for small businesses or e-commerce sellers who may not have the infrastructure to manage large shipping volumes efficiently.

4. Scalability: USPS consolidators can accommodate high shipping volumes, making them suitable for businesses experiencing growth or seasonal spikes in demand. They can handle large quantities of packages, consolidate them, and manage the entire shipping process, ensuring timely delivery and reducing the risk of delays or bottlenecks during peak periods. This scalability can be crucial for businesses operating in an expensive shipping market, where managing increased shipping volumes can be challenging.

5. Tracking and Customer Support: USPS consolidators often provide tracking services and customer support throughout the shipping process. They may offer online tracking tools that allow businesses and customers to monitor the progress of their shipments. Additionally, consolidators can assist with any shipping-related inquiries or issues that arise, providing a higher level of customer support compared to individual USPS shipments.
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In summary, utilizing USPS consolidators in an expensive shipping market can provide cost savings, access to enhanced delivery options, streamlined operations, scalability, and additional tracking and customer support. These advantages make consolidators an attractive option for businesses and individuals looking to optimize their shipping processes and minimize costs in a challenging shipping environment.

Below are the rates for 2019 at Commercial Plus Pricing. Please reach out to me if you have any concerns or questions at [email protected] 


​First Class Package Pricing 

Priority Mail Flat Rate Products

Priority Mail Commercial Plus Cubic

Commercial Plus Weight Zone/Weight Based Pricing

U.S. Postal Office proposes rate for January 27th, 2019. Below is the email and PDF I received today from the USPS tech team. In addition to price cell changes, the changes listed below are expected to enhance or affect USPS product pricing and selection.  The vendor team is still investigating the necessary file, label and manifest impacts and we will distribute our Price Change Review document and schedule our Price Change webinar in the upcoming weeks.   However, with the PRC filing and public announcement, we wanted to share the proposed scope to assist you with your release planning and preparation.  As with other prices changes, please understand that these changes are proposed and are subject to change until final approval from the PRC.
 
1.     Change Priority Mail dimensional weight divisor and apply dimensional weight pricing across all zones.  The dimensional weight divisor will be reduced to 166 and dimensional weight pricing will now apply to all zones.  Balloon pricing will no longer apply.  Please note that Negotiated Service Agreements (NSA) may modify the dimensional weight divisor, dimensional threshold , non-rectangular dimensional adjustment factor, or limit the applicable weights and zones.  Compliant systems should consider these elements as configurable variables.  Expected impact:  Price calculation and postage/tracking reporting via the SSF, NMATS, or Postage Statements.
 
2.     Add dimensional weight to Priority Mail Express and Parcel Select.  Dimensional weight rules similar to Priority Mail will now be applicable to Priority Mail Express and Parcel Select mail pieces.  Expected impact:  Price calculation and postage/tracking reporting via the SSF, NMATS or Postage Statements. 
 
3.     Add zone pricing to First-Class Package Service.   USPS is planning to change First-Class Package Service (FCPS) to a zone-based pricing model.  Expected impacts include:  New processing for FCPS zone calculation and reporting of the zone in the SSF, NMATS or Postage Statements.
 
4.     Eliminate First-Class Mail International weight breaks over 15.994 ounces.  First-Class Mail International (FCMI) will no longer support pieces greater than 15.994 oz.  Mail pieces greater than 15.994 oz. should be mailed via First-Class Package International Service (FCPIS).  Expected impact:  Price calculation and product selection logic.
 
5.     Small parcel forwarding fee.  USPS will implement a forwarding option for USPS Marketing Mail and Parcel Select Lightweight mail pieces.  Expected impact:  ACS account setup with the National Customer Support Center (NCSC).
 
6.     Updates to Postage Statements.  Postage statements will be updated to reflect the above changes and to include corrections from previous releases.  Expected impact:  3600-PM, 3600-FCM, 3602-EZ.
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Hunter Hartman is an eCommerce consultant based in Orange County, Southern California. His focus is on small-to-large eCommerce companies that are shipping business-to-consumer. Most of his clients are based in Southern California but he has clients nationwide. Through his shipping expertise he has helped hundreds of companies save money shipping small parcels and helped to integrate a more automated solution. For more information and a free consultation, please contact Hunter Hartman. Hunter also has his a secondary website, HunterHartman.com ​or visit PostageForce.com

The USPS has released their increased rates that will go into effect January 21, 2018. Shipping services are due to increase across the board and most shippers will see a 5% increase. The USPS went a couple of years without raising rates but as competitors FedEx and UPS are raising rates consistently, the Postal Service has decided to target increases in areas they're winning the business already, to simply increase their margin. 

I recently spoke with a medium sized eCommerce retailer who was battling increased cost from his manufacturing. When he found out there would be an increase in shipping rates with FedEx SmarPost dim rates, he relayed to me he doesn't know how he is going to stay in business. With the 5% increase on the USPS side, he is going to have to re-evaluate how to run his business. Like this customer, it is important to be informed on what is happening to put proper adjustment in play before the changes happen.

First Class Parcel

Like 2017, the first 4 ounces remain the same price but they increase in price by .05 cents. The biggest difference immediately is that in 2017, 5 through 8 ounces were the same cost of $2.77. Immediately this changes as 5 ounces is now at $2.79 and each ounce increases in price. One thing I know was a concern to the USPS were the customers that were shorting the amount of postage on the package. There was a dramatic incentive to keep a package at 8 ounces at $2.77 in 2017 versus 9 ounces for $3.32;. And in 2016 rates were $2.60 1-8 ounces. So it's quite a hike in a two year period. 

Priority Mail Commercial Plus
Priority Mail across the board is increasing but mostly in the low weight areas where Priority mail is competing directly with FedEx and UPS. 

​Flat Rate Products:
Flat Rate products will increase by .60 cents on all the small products. Flat Rate envelope, padded flat rate envelope, small flat rate box and legal flat rate envelope. This is a 10% increase. Medium flat rate increases by .40 cents. 

International: 

First class international is increasing on average 3.9%
Priority Mail International is also looking at a 3.9% increase. 

It makes sense to look at international consolidators. Reach out to Hunter Hartman if you want rates for international consolidators. It is important to stay in front of these changes and have a plan of how to avoid losing margin in shipping cost. Hunter Hartman can help you increase your margin and get around these painful changes to shipping cost. FedEx and UPS are changing their dimensional weights on SmartPost and SurePost and increasing at an average of 5%.. 

Much of this information provided in this blog post was received via Gordon Glazer, Senior Consultant and USPS specialist at Shipware, LLC

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By: Hunter Hartman : Fulfilled by Amazon (FBA) is taking eCommerce sales by storm. I remember the first time I heard of it, I was at a community pool back in 2012 and talking to some friends. One mentioned that Amazon would allow you to subscribe to certain products and you didn’t have to pay sales tax, so the deal was incredible. Since this time, Amazon now forces customers to pay sales tax but the service and culture continues to take over. Next came free two-day shipping when subscribing to Amazon Prime. My wife and I were some of the first to market when we purchased Amazon Prime, now it’s everywhere. We couldn’t believe how great the product was and the service we were receiving. There was no possible way that Amazon was making money delivering products in two days and not charging shipping but we didn’t care, we just wanted our products as quickly as possible. I remember our neighbors would ask us what we were always buying online because it seemed like a truck was coming on a daily basis. This was just the beginning.
 
Fast forward a couple of years and now 65% of Amazon Sellers use FBA  to provide two day shipping to Amazon Prime users, boost sales velocity and improve their rankings.  So, what does it take to sell on Amazon FBA? There are three fees that are involved with FBA which include warehouse fees, fulfillment fees and inventory placement fees.
 
If you do not have an Amazon Professional Seller Account, you will pay 99 cents per label item listed on FBA. This professional account is a slam-dunk if you’re moving any volume on Amazon.


How do you calculate a break-even point for Amazon FBA? Most people get scared they’re going to lose money with Amazon FBA and many actually do. Costs are expensive and it is crucial to keep track of everything. The formula to break even in units = Fixed Costs / sales price per unit – Variable Costs.

• Fixed costs are independent of sales volume. (warehousing, software, property tax, amazon fees, employee cost, shipping, etc). In this case, we’ll calculate $50,000 a year for our example.
• Price per unit: How much does each unit cost? Let’s say $9.99 for example.
• Variable costs: Costs that depend on sales volume. This is the question I always get when communicating with customers. VOLUME,VOLUME, VOLUME…  We’ll set this at $10
• Break Even point= $50000 / $9.99 - $10= 4,995

The key here is that you must calculate total costs, because if you do not, your calculations won’t cover all of your cost and you’ll lose money. It’s always safe to be conservative when calculating this.
 
Amazon makes it easy to figure out the clear guidelines for preparing products for FBA. Each product must be individually package for eCommerce and labels individually based on the product sticking requirements and they must be ready to go.

• Any products sold as a single unit must be packaged together. This includes kits and multipacks.
• Products must be individually packaged and ready to ship. Packages can be clear plastic, opaque, or cardboard. Units that are not in secure packaging must be bagged or secured with non-adhesive bands or tape depending on the product.
• Each product must have a scan able barcode with a UPC, ISBN, EAN, or FNSKU depending on the stickering settings you set up in your account.
• Cartons including multiple units cannot have a scan able barcode.
• Package to protect. Amazon sometimes sends your products directly to the seller in your packaging. Plan accordingly.

Many of my clients in Southern California import products from China to sell online. One common question is if you can have your manufacturer in China ship directly to FBA? The answer is yes. You have a couple of options to do this. You can either ship it directly to Amazon FBA from the manufacturer or you can do freight forwarding. Either way you have to fully trust the people you are shipping product to handle it responsibly.

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Lastly, what do you need to get started selling on FBA? You need a professional seller account, a TAX ID and an application date between January and September, FBA doesn’t allow you to apply during their busy season, understandably so. Once you’re ready to sell, you can visit the FBA page and easily sign up for the service.
 
                

​By: Hunter Hartman
 
I have had the opportunity to sell many USPS products as well as USPS work-share products. Some of these products consist of final mile deliveries being handled by the USPS. There are many work-share products in the marketplace for eCommerce shippers. Reasons these are used is to lower cost and increase profit margin. While there is value in saving money and offering free shipping, there are consequences in slowing down the package to a 3-7 business day delivery. One common theme I’m hearing from customers is the demand to be on Amazon Prime. Amazon Prime has caused tremendous disruption in the last –mile delivery segment. They have been growing 30% since 2011, as detailed by Andre Pharand, Accenture’s global management consulting lead for the postal and parcel industry.
 
Why is it so difficult to compete with Amazon and their tremendous disruption? To start, Amazon is creating expectations for faster fulfillment. There has been an increase in on-demand and same-day delivery. I live in Ladera Ranch, CA and with Amazon Now, I can get product to me in a matter of hours. Most of what I want from Amazon Prime is on Amazon Now and it is being delivered out of enterprise rental vans by 1099 contractors. This is on commodities, books, and entertainment products. There is an even high demand on food delivery and pharmaceuticals. Customers are now demanding a window of delivery within a few hours.
 
There has been an attempt to try to compete with traditional logistics with crowdsourcing apps. Most of these have been successful in urban cities like New York City and San Francisco. As mentioned above with Amazon now, there are companies like Postmates, UberRUSH, and Deliv. The interesting thing about this is people that have a bike or a car that want to make some extra money can with apps. It’s an interesting dynamic that allows for some additional money to be made.
 
With the last mile disruption, the USPS is changing with the times and making an effort to scale with growth. The mail industry has declined year over year. The USPS is the only company in the country that goes to every household every single day. So their residential delivery cost is only incremental to them. It’s much more expensive for UPS or FedEx to go to a residential home, hence why SurePost and SmartPost have become so popular and also why we’re seeing so many additional last mile carriers evolve. I imagine we’ll continue to see change in this industry with the work-share product.
 
We all remember when Jeff Bezos said we were going to have final mile deliveries by drones. We saw this on YouTube and the people out in the sticks said that they would shoot these drones down as target practice. We heard this would violate HOA rewquirements and privacy. Well, these futuristic delivery options are being developed and tested but I still don’t know if I believe they’ll work or not.
 
If this happens, this is going to change the game entirely. The highest cost in a delivery is labor which is about 60% of the total cost. Deliveries are currently limited by labor cost, availability and shifts. Robotic delivery could be done 24 hours a day. Drone deliveries will have a lot of regulation to overcome before it is successful. I see this happening in decades, not years. In places in like San Francisco, it is already being tested but they’ve been testing driverless cars in San Francisco for a long time as well. The culture will have to change before this happens, but as Amazon has proven, convenience and speed will change the culture. 

​Thanks for reading. Let me know if I can help out. - Hunter Hartman

​Hunter Hartman is an eCommerce consultant for Postage Force and is based in Ladera Ranch, CA. His focus is on small-to-large eCommerce companies that are shipping business-to-consumer. Through his shipping expertise he has helped hundreds of companies save money shipping small parcels and helped to integrate a more automated solution. For more information and a free consultation, please contact Hunter Hartman or  visit www.PostageForce.com

Amazon acquired Whole Foods on June 16 sending it's stock up and sending the stock for Krogers and Walmart down. What are some of the benefits of this that others are not talking about? My goal with this blog post is to talk about what Amazon gets out of this purchase and what Whole Foods gets out of this purchase. The grocery business is an $800 BILLION dollar business and Amazon to this point has not interrupted it. Well, I think that has changed with the acquisition of Whole Foods. Below are some ideas I have from the acquisition. 

What does Amazon get from Whole Foods: 
1) Amazon now has access to 430 Whole Foods locations across the United States. Could these turn into fulfillment centers for deliveries? This certainly adds to the Amazon real estate portfolio. 

2) Amazon now has the opportunity to play around with their Amazon Go Technology. This technology allows customers to avoid lines and checkout by grabbing what they need and walking out of the store. Pretty fascinating software that would make convenience, Amazon's motto, enormous. No more standing behind some guy that takes forever while he pays for cash at the line. 

3) With 430 Whole Foods stores across the country, I imagine Amazon is going to target doing pick ups in store. This could happen through refrigerator lockers or orders may be paid on Amazon.com and pickup at the store. My wife knows how much I HATE to go to the grocery store. I can never find where anything is, no matter how 'easy' it seems to be and it always takes me 20-30 minutes even to pick up a couple of items. Well, if lockers work with Whole Foods, my wife can order on her phone what she wants me to pickup and all I have to do is show up and pick it up in a locker. Imagine that? Convenience at it's finest. The cost of picking and packing the product doesn't currently happen because customers pick and pack themselves but with the Amazon Go technology and avoiding checkout clerks, these workers can now work on lockers. This could be one of many game-changers for Amazon. 

4) Have you ever purchased fruits or vegetables from Amazon Fresh? They're usually not very good. They're either too ripe or not ripe enough and typically not as good as if you were go to go Albertsons or Kroger. The one thing that Whole Foods is great at is fruit and vegetables and sourcing these products from around the world. This will give access to Amazon to source their fruits and vegetables and improve their Amazon Fresh business. 

5) Local brands? In Southern California where I live, there are many local curated brands that Amazon doesn't have access to. With the help of Whole Foods, this will change as Amazon will now be able to target these brands and potentially sell this on their website or through Amazon Now. 

​6) My family and I use HelloFresh  each week and get three dinner meals that come. We love it! It's easy and fun to cook and allows me to eat healthier than going out to grab food or having to start from scratch on what to cook. Hello Fresh is one of many companies out there. Blue Apron was just valued at 3 billion dollars. I imagine that Amazon, through resources acquired through Whole Foods will now get into the Meal Kit business. If there is 3 billion of dollars for Blue Apron, why can't Amazon get in on that same product? Though very competitive, this is Amazon's world. 

What does Whole Foods get? 

1) Whole Foods immediately will have access to Amazon Fresh and Amazon Pantry to provide their products and attack a market they haven't had the ability to attack previously. 

2) Whole Foods has used Instacart as their delivery network previously, but with Amazon they now have as robust of a delivery system as there is anywhere. They have access to a guess estimate of 65 million Amazon Prime members they can now target to use their hearty products to. 

3) Amazon Go, as mentioned above will be a tremendous opportunity for the Whole Foods market. Think of the opportunity this can grow to. 

4) Online Presence- Right now, Whole Foods has a minimal online presence. Working with the biggest online marketplace in the world will allow them to tremendously grow their online presence. 

5) Amazon Basics- I imagine that in the next year or so, Whole Foods will probably have 40-50% of their products becoming a Whole Foods brand. The margins are higher and the opportunity is tremendous. Ever purchased batteries from Amazon? Well, Amazon Basics makes a strong argument that it is as good as any of it's competitors. Beware Proctor and Gamble. 

6) International presence- Whole Foods currently has a small international customer base. With Amazon, they can now attack the international market as well as anyone. The four major markets I imagine will be Canada, Australia, New Zealand and Western Europe. Expect Whole Foods to grow in all of these markets. 

7) Amazon Lockers- Delivering packages to customers is what Amazon does best. Amazon Lockers are growing in urban cities and I imagine they'll continue to grow with customers around the country. 

Amazon continues to become a behemoth in the marketplace. Customers need to continue to educate themselves on how to maintain business as well as grow as Amazon continues it's trend to taking over many different industries. 

Thanks for reading my blog. If you're interested in me helpign you with you with your eCommerce business, please reach out to me at [email protected]. 
- Hunter Hartman

​New Rates for 2017 Commercial Plus Pricing
​

 The ​USPS recently released their rate changes for 2017 for all of their shipping services, these changes will go into effect on January 22, 2017. The USPS will not be increasing rates for commercial base, commercial plus or retail pricing for international shipments. This includes Priority Mail International, First Class International and Priority Mail Express. The price increase below include Flat Rate pricing, Priority Pricing and first class pricing.
 
Flat Rate products 

*borrowed from PB.com

2017 Commercial Plus Pricing Priority Rates