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USPS TO RAISE COMMERCIAL PARCEL RATES FOR PEAK SEASON

Published August 26, 2020
Published August 26, 2020
Pope Moysuh via Unsplash

The U.S. Postal Service will temporarily raise prices on commercial parcels during the peak season from October 18 to December 27, the agency said in a news release Friday. The increases are pending approval by the Postal Regulatory Commission.

The surge in e-commerce volumes during the coronavirus crisis has increased revenue, but it has also stressed logistics capacity and profitability for many retailers because the costs of running a delivery network are high.

“This time-limited adjustment will increase prices for our commercial customers in line with competitive practices without impacting customers at the retail level,” the USPS said in a statement. “In doing this, the Postal Service is protecting the retail consumer during a vulnerable economic period while increasing prices on commercial volume during heightened volume levels.”

Parcel rates will increase by at least 24 cents, starting with Parcel Select Destination Delivery Unit (DDU), Parcel Return Service, and Parcel Select Lightweight. The highest increase, $1.50, is for Priority Mail Express Commercial.

Last week UPS disclosed its own surcharges for peak-season shipments that industry consultants said were higher than anticipated. FedEx peak surcharges announced in June are in effect until further notice.

During the third week of March, for example, e-commerce sales in the US were 58% higher than during the same period in 2019. With the coronavirus still raging across the US, it is safe to assume we can expect the increases to continue through the end of the year.

Free shipping has become table stakes to be competitive online. The price hikes from shippers cuts directly into the bottom line for retailers and brands.

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