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.
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
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
Hunter Hartman is a shipping consultant in the eCommerce world. He blogs about the changing landscape of shipping.