By James Messer / www.shipstation.com / September 17th, 2020
For ecommerce businesses, the holiday season is generally a time of increased sales volume, stress, and telling your parents “Hopefully we’ll be able to fly in by Christmas Eve!”
This year, however, ecommerce volume has outpaced its own projections by 4-6 years. While this is largely good news for merchants, there has not been the broader support needed to accommodate for this larger volume. From supply chain shortages to social distancing measures to underfunded and under-staffed postal carriers, merchants and customers alike are experiencing delays and additional charges and challenges with each transaction.
As such, the USPS has announced for the first time ever a holiday surcharge. This is not to be confused with their annual rate increase that usually happens at the tail end of the holiday season/beginning of the year. Instead, this is a temporary rate hike that the USPS has announced serves to cater to the increased demand for ecommerce order volume and additional expenses resulting from COVID-19. The USPS’s mission to deliver to every American address with minimal profit margins has made it difficult to function as it was initially designed. Luckily, these rate increases are temporary and not too steep.
The planned price increase is planned to start Oct.18, 2020, and will remain in place until Dec. 27, 2020.
USPS Rate Increase
| Service |
Proposed increase |
| Parcel Select Lightweight |
$0.24 |
| First Class Package Commercial |
$0.25 |
| Priority Mail Commercial |
$0.40 |
| Parcel Select Ground |
$0.40 |
| Parcel Select DSCF |
$0.40 |
| Parcel Select DNDC |
$0.40 |
| Priority Mail Express Commercial |
$1.50 |
USPS Priority Flat Rate Increase
| Service |
Proposed increase |
| Flat Rate Envelopes |
$0.20 |
| Legal Flat Rate Envelope |
$0.20 |
| Padded Flat Rate Envelope |
$0.20 |
| Small Flat Rate Box |
$0.15 |
| Medium Flat Rate Boxes |
$0.40 |
| Large Flat Rate Boxes |
$0.70 |
| APO/FPO/DPO Large Flat Rate Box |
$0.70 |
USPS Priority Flat Rate Increase
| FCPS Commercial | Starts at $2.74 |
| Priority Mail Commercial | Starts at $7.02 |
| Parcel Select Ground | Starts at $6.92 |
| Parcel Select DSCF | Starts at $4.37 |
| Parcel Select DNDC | Starts at $5.98 |
| Priority Mail Express Commercial | Starts at $22.75 |
Mike O'Brien with Multichannel Merchant elaborated by stating "In its most recent quarter ended June 30, the USPS lost $2.21 billion, down from $2.26 billion a year earlier. Its so-called controllable loss, after backing out workers’ compensation adjustments and unfunded retiree health benefits, rose from $1.1 billion to $1.5 billion. Shipping and package revenue increased 53.6% or $2.9 billion to $8.3 billion, on a volume increase of 50% or 708 million pieces."
Ship Watchers is a logistics auditing company that keeps carriers compliant on rates, surcharges, incentives, and incorrect charges found within carrier invoices.
Want to stay on top of carrier increases, rate changes, and benchmark studies while insuring that your invoices are free from errors and incorrect charges? Give us a shout to learn more at oncall@shipwatchers.com or by calling us at 800.550.7217 ext 874.
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