USPS preps for Priority Mail Regional Rate Box debut
December 20, 2010
In November, the United States Postal Service (USPS) heralded the release of a new service geared specifically for shippers mailing on a regional basis, entitled the Priority Mail Regional Rate Box.
This box is comprised of USPS-supplied packaging in two sizes for its shipper-focused Commercial Base and Commercial Plus customers. This new offering, according to the USPS, offers zone-based pricing with flat rates up to a maximum of 15 pounds for the cubic-size box measurement of .21 cubic feet and a maximum of 20 pounds for the cubic-size measurement of .41 cubic feet, along with reductions in volume for Commercial Plus customers.
“Cube-based pricing has already been in place at the USPS, but it was only available for shippers mailing 400 packages per day, and now the threshold is much lower,” said Doug Caldwell, principal of ParcelResearch.
Lowering these thresholds is part of the USPS’ strategy to go after larger mailers, with discounts available at their fingertips, according to USPS Vice President of Shipping Services Gary Reblin.
Among these discounts, which take affect along with the Priority Mail Regional Rate Box on January 2, are relatively modest 3.2 percent and 2.0 percent across the board increases for Commercial Base and Commercial Plus Pricing, as well as lower volume thresholds for CPP customers to qualify for discounted pricing, which include minimums of 75,000 pieces per year for Priority Mail packages and 5,000 pieces per year for Priority Mail flats, among others.
“We recognize and want to go after the larger mailer and want to have discounts available without any surcharges so they can take advantage of this and be able to plan their yearly spend,” said Reblin. “We think budgeting is a huge advantage to what the USPS offers.
And a significant part of helping shippers manage budgets was to offer them price points that make sense, he explained.
When talking with shippers, Reblin said he would hear from those not using flat rate boxes, which the USPS has had for six years, was not that they did not like it, it had more to do with their regional mailing habits. He explained that 48 percent of all packages are shipped in Zones 1-3, with flat rate boxes going out to Zone 8. What the USPS does is sell this service at an average price between Zones 4 and 5.
But smaller shippers instead do not want to pay an average price of Zone 4-5 and want something that is better designed for them.
“What we looked to do was take the same concept of ‘if it fits, it ships’ and put the zone price on it for those regional shippers to now say this is something you can get a good price on for going local Zones 1-2, and we are targeting that 48 percent of the industry shipping regionally from Zones 1-3,” said Reblin.
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