If you’re already in the e-commerce retail business, you have realized by now that there has been an increase in shipment costs. That’s because the USPS was given the go-ahead to alter its prices, which overwhelmingly meant increasing shipping rates across the board. For businesses just getting into shipping this year, this cost obviously hasn’t changed. But those who have been shipping packages for a while would have had to adjust to the 2016 postage rate increase.
Understand that this USPS postage increase for 2016 also means that both UPS and FedEx have increased their rates. So you’re not exempt from these increases no matter which carrier you choose. What you need to do is know precisely what your new shipping costs will be, determine where you can find some savings, and adjust your budget accordingly.
Overview of Some of the USPS 2016 Rate Changes
Here are some of the main USPS 2016 rates that you’ll need to get familiar with:
- Commercial Plus Pricing (CPP). Many of the discounts are either gone or have been reduced substantially. This was done to bring these costs to roughly three percent of Commercial Base Pricing (CBP).
- International labels and domestic labels requiring an integrated customs form are seeing a new label layout.
- The new name for Standard Posts is now Retail Ground. Also, Parcel Select Nonpresort is now Parcel Select Ground.
- Parcels with weights up to 15.99 oz are supported by First Class Package Service. This is for all Commercial Base shippers and the weight limit is up from 13 ounces last year.
The Impact of USPS Shipping Rates on E-Commerce Business
You’ve already been dealing with these changes for six months, but there are some ways to better manage your bottom line. The increase in rates is simply a matter of expenses, which means you need to figure out your new costs and what the best method of delivery will be moving forward.
Flat rates may be a good idea for this year. You essentially get the benefit of shipping nearly any weight package to any zone for the same price. Put those rates head to head against Priority Mail or Regional Rates and you’ll more than likely come out on top.
For all the online-based retailers, you would have noticed that you no longer see any Commercial-based discounts on the USPS website. Click and Ship has the new Retail Rates, so for those shippers doing low volume, your best bet is moving to an electronic postage provider. This will also open up the door to classes like First Class Package Service.
Regardless of how you move forward, it’s important you have a plan. These 2016 postage rate increases are too significant to ignore. APS Fulfillment, Inc. can help develop a strategy that works specifically for your company. Contact us now by phone at 954-582-7450 or by e-mail at [email protected] and we’ll discuss how we will use our experience, technology, and network of resources to carry out an effective logistics operation.