Thursday, November 12, 2009

USPS Discounts for Small Parcel Shippers

In January the US Postal Service will be offering several new products aimed at small–package shippers, including cubic volume-based pricing for large-volume commercial Priority Mail shippers and a Priority Mail half-pound price, based on distance, in the Commercial Plus pricing category.

As reported in the Multichannel Merchant, the USPS’s half-pound option will likely capture a lot of new interest, according to Gerard Hempstead, president of Hempstead Consulting and a former vice president for DHL, “because an awful lot of 1-lb. shipments moving today weigh far less than 1 lb.”

And the Postal Service’s cubic volume-based pricing means customers who ship small dense, space-efficient packages will receive a financial incentive through a new, tiered pricing option. Hempstead says this new offering is the opposite of what the commercial carriers do, which is charge the higher of the actual weight or the cubic weight (L x W x H / 194). “The USPS is sharing its productivity improvement with incentive based lower pricing.”

The USPS purchases containers on the FedEx network and it operates its own surface transportation network that has excess capacity on the trucks, Hempstead explains. As a result, the more weight USPS can get into a cubic foot, the lower its costs are going to be to transport and the better yield it will have.

The Postal Service is also offering a Priority Mail Flat Rate padded envelope just for Commercial Plus shippers. The 9-1/2” x 12-1/2” envelope is specially designed for jewelry, electronics and other delicate goods.

A complete listing of 2010 prices is available HERE. The new prices and product innovations are pending Postal Regulatory Commission review.

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