The major small package shipping companies have announced their new rates for 2010, which become effective on January 4, 2010. FedEx® announced an average increase of 4.9 percent, as did UPS™. Both companies announced increases for ground shipping options of 4.9%, with higher increases for expedited and international shipments. The higher increases, around 6.9%, are being offset somewhat by lowering the fuel surcharges by 2%. It is important to note that along with the increase to their base rates, UPS and FedEx are also increasing their accessorial charges and surcharges. It is important for shippers to take these additional increases into account as well as the base price increases, as the accessorial charges can really add up.
The United States Postal Service® (USPS®) announced increases on their shipping prices of 3.3% on average. The USPS price structure does not include accessorial charges such as residential delivery, Saturday delivery or fuel surcharges.
USPS Price Percentage Changes by Category
For companies who ship packages in bulk quantities, there are reduced rate Commercial Base prices and Commercial Plus prices. Commercial Base pricing reflects a savings of 5% to 10% over retail prices, depending on the shipping category. Commercial Base pricing is available for qualifying Express Mail, Priority Mail, Global Express Guaranteed, Express Mail International and Priority Mail International shippers. There are varying qualifying criteria for each category of shipper, such as using Permit, PC Postage, Click-N-Ship, or an approved Information Based Indicia (IBI) metering device.
Commercial Plus prices are available for large volume shippers who meet the criteria for Commercial Base pricing, and who ship more than 100,000 Priority Mail packages per year, or more than 6,000 Express Mail packages per year, or who have a customer commitment agreement with the Postal Service. The savings over Retail prices for this category range from 9.6% for Priority Mail to 14.5% for Express Mail.
The USPS also made some other interesting changes in their rate structure for 2010:
- There are some rates that are actually going DOWN! The retail price for Priority Mail Flat Rate Envelopes went down from $4.95 to $4.90. These Priority Mail flat rate envelopes are already a super deal, so this rate reduction makes them even more attractive. Like the TV commercials say, “If it fits, it ships.” For mailers shipping in bulk quantities, they may be able to qualify for even lower rates if they meet the qualification requirements for Commercial Base or Commercial Plus pricing.
- The Priority Mail one pound price is now zoned (previously mailpieces under 1 lb. were the same price, regardless of the zone). I’m not sure why the USPS would want to complicate the rate structure with this move, so we’ll see what impact it has on shipping volumes.
- There is a “new” half-pound price for Commercial Plus items.
- The USPS added new Cubic Volume Commercial Plus price tiers (5 tiers) to encourage smaller & more space-efficient packaging. Cubic Volume is based on size rather than weight: the smaller the package, the lower the price (even if it’s up to 20 lbs.). Shippers should be able to save a lot of money using this option, both in packaging materials and in shipping charges. Shippers still have the option to use the weight-based rates.