USPS Prices Going Up, Staying the Same, Going Down in 2010

9 Nov

It must be November.  The weather deteriorates.  I wake up in the dark and go to bed in the dark even during months I remember to pay the electric bill.  Whole Foods tries to convince me their $34.99 a pound turkey will bring a smile to my children’s face the way a 39 cent turkey simply wouldn’t.  I have to upgrade (sad, but true) to Ezra Brooks because 80 proof doesn’t warm in the winter months the same way it does in the summer.  The United States Postal Service ruins my life.  Just another November.

On November 4 the Post Office announced pricing changes that will go into effect January 4th for Priority Mail, Express Mail, Global Express Guaranteed, Express Mail International, Priority Mail International, Parcel Select and Parcel Return Service.  Pricing changes for Media Mail and additional services such as Delivery Confirmation and Signature Confirmation are announced at a later date and will remain the same for at least the first half of 2010.

Just the Facts, Jack

What’s Going Down

The price of a Priority Mail Flat-Rate Envelope will decrease a nickel to $4.90 from $4.95 when purchased at the Post Office and decrease to $4.75 from $4.80 when purchased online.

The price to ship one pound Priority Mail locally (defined as only one or two zones away) is also decreasing a nickel from $4.95 to $4.90.

What’s Staying the Same

The price of domestic and international First-Class Mail, Standard Mail, and Parcel Post will remain the same in 2010.  This means a First-Class stamp will still cost 44 cents and a 19 pound Parcel Post package will still cost $24.64.

Customers who pay for shipping online through Click-N-Ship, PayPal, etc. will continue to receive a discounted rate when compared with the price paid at the Post Office or equivalent retail location.

The price of the recently introduced Small Flat-Rate Box will remain $4.95 when paid for at the Post Office.  When postage is purchased online the cost of the Small Flat-Rate Box goes up a nickel to $4.85.

No earth-shattering changes announced.  No mention of charging for shipping supplies, delivering only on days that start with the letter “T,” or a completely new class of mail.

What’s Going Up

Priority Mail

According to the press release, Priority Mail rates are going up 3.3% on average which is about the standard yearly increase.  Domestic Express, International Express and Priority, and Parcel Select and Return Service are also going up across the board.

The most glaring pricing change for those of us who sell on eBay is how USPS is treating Priority Mail that weighs one pound or less and is shipped in variable rate packaging (either your own packaging or branded Priority Mail packaging that is not Flat-Rate).  As you may be aware, the current price to ship a package weighing one pound or less is the same no matter where it is shipped.  The price of variable weight Priority Mail that weighs more than one pound is based on both the weight and how far the package will be traveling. For example, today I can send a one pound package from Seattle to Portland Priority Mail for $4.95.  I can send that same one pound package Priority Mail to Boston for the same price, $4.95.  Come January 4, 2010, I can ship a one pound package Priority Mail to Portland and it will cost $4.90.  If I ship that same package Priority Mail to Boston it will cost $5.55, an increase of 60 cents or a whopping 12.12% over 2009 prices.

Although the average price increase on Priority Mail is advertised at 3.3%, the price increase on lower weights is much, much higher.  For example, a two pound Priority Mail variable weight package from Seattle to Boston currently costs $8.70.  That’s going up to $9.55 in 2010, an increase of 85 cents or 9.77%.  A three pound package goes up from $11.95 to $12.70, an increase of 75 cents or 6.3%.  A four pound packages goes up from $14.70 to $15.30, an increase of 60 cents or 4.08%.  Finally, a 70 pound variable weight Priority Mail package goes up from $108.25 to $111.50, an increase of $3.25 or 3% even.  As you can see, the price increase on lower weights is much higher than on heavier weights by percentage.

The price of Flat-Rate Boxes is also going up.  Medium Flat-Rate Boxes go up from $10.35 to $10.70, an increase of 35 cents or 3.38% when purchased at a retail location and from $9.85 to $10.20 when purchased online, also an increase of 35 cents or 3.55%.  Large Flat-Rate Boxes go up from $13.95 to $14.50, an increase of 50 cents or 3.44%.

Express Mail

The price of the Express Mail Flat-Rate Envelope is going up from $17.50 to $18.30 at retail and from $16.63 to $17.40 when purchased online.  Both represent about a 4.5% increase.

Express Mail variable rate prices look to go up about 4.5% across the board as well.

International Mail

Priority Mail International Flat-Rate Envelopes are going up 50 cents to $11.45 for Canada and Mexico and 50 cents to $13.45 everywhere else.  The price is identical to the new cost of the Small Flat-Rate Box.  Medium Flat Rate Boxes are going up $1 to $26.95 for Canada and Mexico and $1.50 to $43.45 to all other countries.  The Large Flat-Rate Box is also going up $1 to $33.95 for Canada and Mexico and $2 to $55.95 everywhere else.  The maximum weight remains four pounds for Flat-Rate Envelopes and Small Boxes and twenty pounds for Medium and Large Flat-Rate Boxes.

Priority Mail International prices are also going up 2-6% for variable weight packaging.

Express Mail International Flat Rate Envelopes are going up $1 to $26.95 for Canada and Mexico and $1 to $28.95 everywhere else.

Express Mail International in variable weight packaging is also going up 3-4%.

“Innovations”

The USPS news release mentions “several innovations” that we can look forward to in 2010.  These include further discounts for those who qualify for “Commercial Plus Pricing” and also ship in whatever USPS defines to be environmentally friendly packaging.  To qualify for Commercial Plus Pricing one must ship 6,000 pieces Express Mail yearly or 100,000 Priority Mail pieces yearly.  Also available to Commercial Plus shippers will be a new 9.5 x 12.5 Priority Mail Flat-Rate padded envelope.

Commentary

Disappointment

I was going to turn this into one of my usual comedyfests, but decided since it’s a serious topic about all the money you’ll be losing in 2010 I would stick to the nuts and bolts.  Not sure you got through it, but if you did congrats.  I hope you learned something and are in a better position to prepare yourself for the changes coming.

I was “really” hoping that Priority Mail International Flat-Rate Envelopes would be scanned at the time of delivery and PayPal would treat these packages the same way they treat domestic packages with Delivery Confirmation (i.e. grant a claim in the seller’s favor for “items not received” when the Delivery Confirmation shows it was delivered).  This has been my dream for several years now and what I wish for every year my Mother remembers to bake me a birthday cake with candles to blow out.  The cost of trackable international shipping is ridiculous.  Thirty dollars for an International Flat-Rate Express Envelope?  Twenty dollars as an absolute minimum to ship a package with tracking abroad?  Customers scoff at paying $20+ for shipping on a package that’s anything less than a 25 pound solid gold bar. Shipping with tracking is the only way to protect ourselves as sellers accepting PayPal, so shipping without tracking simply isn’t worth the risk.  I know my sales would skyrocket if I could offer $10 Priority International shipping, but I also know my bottom line would suffer at the losses from fraudulent PayPal claims and the dreaded “lost package.”

The price increase on Priority Mail variable weight packages is rough.  Shipping a one pound package Priority Mail has always cost the same amount no matter where it’s shipped. The 12%+ increase in 2010 will take a noticeable cut out of my profits.  I will be utilizing Flat-Rate Envelopes even more to stuff in whatever I can.  I know in the past I’ve gotten some funny looks from Postal employees who balk at my “creation,” but the envelopes usually get to their destination more or less.  I know my customers are happier to receive a nice, well-packaged box, but if it means saving a McDonalds Small Fry I know how I’ll be packaging January 5th.

This year’s “innovations” are a joke.  There aren’t even 50 sellers on eBay who ship 100,000 Priority Mail packages yearly to qualify for Commercial Plus.  The cubic volume-based pricing discount for whatever “space-efficient packaging” is would be welcome I’m sure, but I doubt whatever the discount is would cancel out the money companies save by only using one standard box for shipping everything from a camera battery to a mattress.  Let’s be real here.  The number one reason why USPS loses nearly a billion dollars a month is because companies are sending less dump-clogging catalogs.  No one at USPS was looking to slow down that fluff when the dollars were pouring in. Plus, how is USPS going to identify who’s packaging efficiently? Will they take Amazon’s word that the box is full of precious merchandise rather than plastic bags full of air? Most of us will never know unless we decide to start shipping 100,000 individual Lego pieces around the country just for fun.

I was hoping USPS would offer tracking similar to Express Mail or the more advanced tracking UPS and FedEx offer on Priority Mail.  If USPS could offer advanced tracking for a dollar or two per package many customers would likely be interested. It might also be enough to land them accounts with some of the larger corporations that tend to go with UPS or FedEx.  From personal experience I know that tracking a package is more fun than actually receiving whatever it is I purchased in a moment of weakness half the time.  I have a dozen damaged pears I bought from Harry and David coming on Tuesday that I’ve tracked online at least a dozen times.  I’m sure the pears will be good, but I doubt they’ll bring me as much joy as when I saw them finally leave Hodgkins, IL online at UPS.com.

Could Be Worse

We’re smart enough to know price increases are coming.  The price increase on Priority Mail variable weight will definitely be an issue for many in 2010 and will dramatically change how I package many of my items.  There was no mention of charging for shipping supplies or basic carrier pickup which were two of my fears.  There was also no mention of closing every single Post Office in Washington State which gives me hope for the future.  I actually expected USPS to do away with Flat-Rate Envelopes.  Some of the items I’ve crammed into one of those things have been ten times or more the original size of the envelope. I know many people “abuse” their originally intended purpose which was a sturdy way to ship documents.  Instead, USPS is giving us even more incentive to cram because it will now be cheaper to use a Flat-Rate Envelope than ship Priority Mail any other way.

Overall I am not crestfallen by any of the announcements, but time will tell how they play out.

Feel free to check out some of the literature USPS has provided us about the pricing changes:

See the USPS Press Release
See the Full List of 2009 Prices
See the Full List of 2010 Prices

Until next time, good luck and try not to get suspended.

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