It’s that time of year again – rate increases from USPS are looming on the horizon and it’s time to start preparing. Put it on your calendar for early January to make any adjustments to your pricing and customer service strategy to reflect the changes which take effect on January 27, 2019. (Note: These new rates are subject to approval by the Postal Rate Commission (PRC), which is widely anticipated).

Overall, rates increased for most products, weights, and zones. We’ll go over changes to the most popular USPS shipping services including Priority Mail, First Class Package, Flat Rate, and Regional Rate.

Here are the highlights of the USPS 2019 Shipping Rate Changes:

  • Priority Mail rates will increase for most packages by an average of 6.2% and Priority Mail Express (as well as Priority Mail Express International) will increase by an average of 3.9%
  • A major change to note is that First Class Package service rates will now be calculated based on Zone (like Priority Mail). This service will also experience an average rate increase of 11.9% across the board. First Class International rates will increase by an average of 3.9%
  • The USPS is extending dimensional weight (DIM weight) to Priority Mail and Priority Mail Express for packages larger than one cubic foot. The DIM weight divisor is changing from 194 to 166. Note: USPS has said that Dimensional Weight changes won’t be implemented until June 23, 2019 to allow time for adjustments. This includes planned changes to the divisor. Balloon Rate on Zones 1-4 will be eliminated effective January 27 as announced, which may benefit retailers who ship large, light packages.

Now for a bit more detail on the changes that will have the greatest impact for e-com sellers:

Priority Mail Flat Rate

USPS Priority Mail Flat Rate is used by a lot of e-com businesses for the simplicity and the free packaging. Ship it for one flat rate regardless of how much it weighs or where it’s going. That part stays the same for 2019. However, prices are increasing by about 10% on Flat Rate products.

Flat Rate2018 Commercial Plus2019 Commercial PlusPrice Increase
Flat Rate Env$6.35$6.95$0.60
Padded Flat Rate Env$6.90$7.55$0.65
Small Flat Rate Box$6.85$7.50$0.65
Medium Flat Rate Box$12.45$12.80$0.35
Large Flat Rate Box$17.10$17.90$0.80

 

Priority Mail

Priority Mail is on the increasing an average of 5.9%. However, not for every zone or weight. For example Zone 1 is rising by approximately 9%, while Zones 5, 6, and 7, stay the same at current 2018 prices for certain weights.

As an example, here is a comparison between 2018 and 2019 prices for a 4 lb. package to the different zones. These prices are Commercial Plus prices (the price you get through your SmartShyp account. The retail prices through a USPS branch are higher).

Priority Mail2018 Commercial Plus2019 Commercial PlusPrice Increase
Zones 1 & 2$7.09$7.71$0.62
Zone 3$7.81$8.20$0.39
Zone 4$8.43$8.81$0.38
Zone 5$10.03$10.03$0.00
Zone 6$13.75$13.75$0.00
Zone 7$15.59$15.59$0.00
Zone 8$17.61$17.61$0.00
Zone 9$24.30$24.78$0.48

 

Another thing to note about Priority Mail changes is the Dimensional (DIM) Weight divisor is changing from 194 to 166. This only applies if you ship large but lightweight packages. Essentially, lowering the divisor means you will be paying more for those types of packages. For specifics on how DIM is calculated look here: https://www.usps.com/dimensionalweight/ NOTE: this link is the current DIM information and has not yet been updated to 2019 pricing.

First Class Package Service is going to the Zone

This is the change that will likely affect the greatest number of e-com sellers since it is used extensively in fulfilling lightweight packages (less than one pound). Current pricing is based entirely on weight. How far a package travels doesn’t matter. It costs the same to ship within the same city as it does to ship across the country.

But that all changes in 2019 with zone based pricing. With zone based pricing, the distance it has to travel now dictates the cost.

Let’s look at an example to illustrate. Currently, it costs $2.66 to ship a 1 oz package, no matter where it is going. A 15 oz package costs $4.94 regardless of destination.

In 2019 zones 1&2 remain the same as 2018 prices. But beyond that every other zone is increasing.

So in 2019 that 1-ounce package would still cost $2.66 for Zones 1 and 2, but it would cost $3.09 for Zone 8. And the 15 oz package will stay at $4.94 for Zones 1 and 2, but will increase to $5.53 for Zone 8.

If you’ve only ever used First Class Package Service up until now, you may not be well versed in zones. Basically zone 1 is near, and zone 8 is far. Zone 8 applies to packages shipping all the way across the country from one coast to the other. (There is also a Zone 9 which applies to areas outside the contiguous 48 states. Ie: Alaska, Hawaii, Puerto Rico, etc.)

Clearly, this will impact sellers on the coasts more than sellers in Nebraska (where any point in the country is only a maximum zone 5 away.

Of course, this adds complexity that didn’t previously exist and you’ll need to think through how to accommodate and communicate these new costs.

 

2019

First Class

1 & 2Zone 3Zone 4Zone 5Zone 6Zone 7Zone 8Zone 9
1 oz$2.66$2.68$2.70$2.76$2.84$2.96$3.09$3.09
2 oz$2.66$2.68$2.70$2.76$2.84$2.96$3.09$3.09
3 oz$2.66$2.68$2.70$2.76$2.84$2.96$3.09$3.09
4 oz$2.66$2.68$2.70$2.76$2.84$2.96$3.09$3.09
5 oz$3.18$3.20$3.22$3.28$3.36$3.49$3.63$3.63
6 oz$3.18$3.20$3.22$3.28$3.36$3.49$3.63$3.63
7 oz$3.18$3.20$3.22$3.28$3.36$3.49$3.63$3.63
8 oz$3.18$3.20$3.22$3.28$3.36$3.49$3.63$3.63
9 oz$3.82$3.85$3.88$3.96$4.06$4.19$4.33$4.33
10 oz$3.82$3.85$3.88$3.96$4.06$4.19$4.33$4.33
11 oz$3.82$3.85$3.88$3.96$4.06$4.19$4.33$4.33
12 oz$3.82$3.85$3.88$3.96$4.06$4.19$4.33$4.33
13 oz$4.94$4.98$5.02$5.12$5.24$5.38$5.53$5.53
14 oz$4.94$4.98$5.02$5.12$5.24$5.38$5.53$5.53
15 oz$4.94$4.98$5.02$5.12$5.24$5.38$5.53$5.53
15.999 oz$4.94$4.98$5.02$5.12$5.24$5.38$5.53$5.53

 

Those are the changes that will impact the largest number of e-com sellers and SmartShyp customers. Of course, SmartShyp will be updating all of our labels so the new USPS pricing will be automatically calculated. You don’t have to do anything with your SmartShyp account.

You may, however, want to adjust your pricing strategy if you offer free shipping to accommodate the new costs. Or plan an info blast to inform your customers about the changes so they understand why their shipping is going up.

To read the USPS announcement click here:

https://www.prnewswire.com/news-releases/us-postal-service-announces-new-prices-for-2019-300728946.html

For a complete list of all proposed changes click here: https://pe.usps.com/pricechange/index