It’s that time of year again when all the major shipping carriers announce their new rates. This year, according to Christopher Vaughn in Mailing Systems Technology, rates are going up across the board.
“But in the case of USPS,” Vaughn writes, “this year’s changes are more aggressive than in previous years due to two major factors: The overall magnitude of the rate increases, which is larger than prior years; and the scope of process changes, which include a major expansion of dimensional pricing, and a move to zone-based pricing for First-Class Package Service (FCPS).”
Let’s break down the first factor, the overall rate increases. At a glance, you can see the USPS rate hikes for 2019 are steepest for First Class Package Service (FCPS), averaging 12%:
Image source: MailingSystemsTechnology.com
As Vaughn explains, the main driver of the FCPS rate hikes is the introduction of zone-based pricing.
“Historically, FCPS pricing was based solely on weight, regardless of destination zone. Starting this year, FCPS rates consider both weight and destination zone,” he explains. “Our analysis shows that virtually every 2019 FCPS weight/zone combination carries a higher rate than 2018 weight-based pricing.”
In spite of the USPS hikes, in many cases they are still a good value compared to other shippers, especially when sending packages of less than one pound:
Image source: MailingSystemsTechnology.com
Things get a little more interesting when breaking down the dimensional pricing factor.
“Dimensional weight is the ‘weight’ used to calculate the shipping cost of large lightweight packages,” Vaughn explains. “At some point, the cost of shipping such packages becomes driven more by the amount of space they take up than by their physical weight; carriers therefore use dimensional weight to more closely match the prices they charge for large lightweight packages to the costs of shipping such packages.”
To compare providers, Vaughn gives us the example of shipping a 3-pound backpack in a box that measures 22 x 14 x 6 inches:
Image source: MailingSystemsTechnology.com
Mailers can help save on dimensional mailing by limiting excess packing material and using smaller boxes whenever possible. You might also be able to save some money with USPS flat rate boxes, which allow you to send anything up to 70 pounds for one price as long as it fits in the pre-sized box.
While rate hikes are nobody’s idea of a good time, especially for businesses that rely on stable and efficient shipping, information is key to getting your best value. We’ll do our best to keep you informed.
June 16, 2020, 10:46 am