USPS rolls out proposed 2013 rate hikes

The United States Postal Service (USPS) recently rolled out new prices set to take effect on January 27, 2013, pending approval from the Postal Regulatory Commission.

Rates that stand to have the most direct impact on shippers include:
-Priority Mail increasing 6.3 percent, with delivery confirmation, which used to cost $0.85 for retail customers now free;
-Domestic Express Mail increasing 5.8 percent;
-Parcel Post, its ground service for less-than-urgent deliveries and oversized packages geared towards e-commerce retailers and other high-volume customers shipping lightweight packages short distances, increasing 6.3 percent, also with free delivery confirmation;
-Parcel Select, its ‘Last Mile’ product geared for large and medium sized shippers looking for an economical ground delivery service and whose rates are used by UPS SurePost, FedEx SmartPost, Newgistics, and other consolidators, is going up 8 percent for packages dropped off at local post offices for “last mile” delivery by the USPS and 9 percent on average, with prices for Lightweight Parcel Select, formerly Standard Mail commercial parcels, will increase by 9.8 percent;
-Global Express Guaranteed increasing 9.6 percent; and
-Express Mail International increasing 13.2 percent.

USPS officials said that several new Shipping Services products will be available in January, with free tracking to be offered to all competitive products, including retail Priority Mail and ParcelPost, which was recently renamed as Standard Post.

And it is also planning some international discount programs for 2013 but details are not available at press time.

During the fiscal third quarter, the USPS incurred a net loss of $5.2 billion, compared to a $3.1 billion net loss for the same quarter in 2011. Factoring largely in the loss was $3.1 billion for the legislatively mandated prefunding of retiree health benefits, coupled with the continued decline of First-Class Mail volume, which it said more than offset the quarter’s 9 percent growth in revenue from Shipping Services and package delivery.

USPS Shipping Services and package revenue totaled $3.3 billion in the third quarter, a 9 percent increase, on a volume increase of 43 million pieces, or 5.2 percent, the USPS said.

“Despite continued success in generating new package delivery revenue, improving efficiency and reducing costs, large losses are expected to continue until legislative changes are made in line with the Postal Service Business Plan to return to financial stability,” the USPS said.

But despite its financial difficulties, an industry analyst said that there are some positives it has going, too.

“The Postal Service is currently the fastest growing U.S. carrier, so they must be doing something right,” said Doug Caldwell, VP, EMEA at AMFS. “It has made major gains in package tracking over the last year as well.” 

Caldwell added that as Parcel Select rates “are getting a bit high,”  it allows some high volume shippers to move to local courier delivery, and save a few cents per package.