US Postal Service Boosts Shipping Rates

Date: January 18, 2016

New Rates Affect Commercial Packages Often Sent By Small Businesses

The San Francisco Business Times reported in its “Bay Area BizTalk” blog that the US Postal Service, effective Sunday, will raise rates for two services “in a move that will increase the shipping costs of many small businesses.” The 9.8% rate increase for USPS Priority Mail service affects commercial packages, “a change that will mostly affect small businesses,” the story said, adding that the agency “joins many shipping companies raising prices, including FedEx and UPS, which raised their rates 4.9 percent in the last month.” Prices for USPS’ Priority Mail Express will go up an average 14.4%, the Business Times said, noting that “the price of a first-class stamp will stay the same at 49 cents.” A USPS spokeswoman told the newspaper, “Unlike other shipping companies, the Postal Service is not implementing any new dimensional weight charges with this pricing proposal, continuing its commitment to deliver an excellent value for customers.” Transport Topics, also reporting on the Priority Mail and Priority Mail Express increases, quoted USPS spokesman Roy Betts as saying: “This is the first price increase in more than three years. Calculated over that three-year period, overall the price change averages out to 3.3% per year.”

What This Means For Small Businesses

These changes will hit small businesses hard, and it’s important that small business owners take stock of their shipping methods. In comments to Small Business Trends, global eCommerce company Pitney Bowes said it “believes the changes mean small business shippers must begin thinking in new ways.” Pitney Bowes Vice President Jeff Crouse advised, “The one guiding principle that all small businesses should observe for their sending is to look at the data to select the best carrier mix. By analyzing their data on delivery performance and cost, they can ensure the right packages are sent via the right carrier” through “a multi-carrier approach.”

Additional Reading

Target Marketing Magazine, MSN, and the Retail Dive also reported on the shipping increases.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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