Minimizing the Budget Impact of Recent Shipping Rate Adjustments
by Ken Neal
February 12, 2016
The latest USPS rate increase in three years took effect on January 17, 2016. Although cost increases are inevitable, this is a good time for mail centers to review and sharpen their shipping practices to lessen the pain resulting from the latest rate increases from all three services providers – UPS, FedEx and USPS.
Despite a USPS increase ranging between 10% and 17%, the USPS rate is still a good value compared to shipping rates from competing services.
While the USPS is implementing a number of procedural changes, three notable USPS rate changes are as follows:
- First Class Packages under 8 ounces have a flat rate of $2.60. Maximum weight has increased from 12.99 ounces to 15.999 ounces. Pay close attention to packages close to one pound.
- Priority Mail Express Flat Rate boxes are discontinued.
- Click n Ship customers will no longer be eligible for Commercial Based Pricing discounts.
The USPS rate adjustment follows the UPS and FedEx adjustments:
- UPS: In December 2015, the rates for UPS Ground and UPS Air and International shipping increased close to 5%.
- FedEx: Effective January 4, 2016, FedEx increased rates by close to 5% and implemented Dimensional Weight pricing on all shipments.
Anticipating the rate increase, Canon Business Process Services recommends several steps to optimize shipping costs.
- Review your shipping volume, cost, and pattern and adjust the future shipping practices to optimize the total annual shipping cost.
- Use technology to achieve key cost-cutting benefits by being better able to: gain control and visibility into the cost of shipping parcels; select the best rate and carrier for each parcel in real time; and automatically assign shipping charges to accounts and department codes
- Pay attention to packaging. Minimize outer package dimension and weight – especially for packages close to 15.999 ounces. With both FedEx and UPS Dimensional Weight pricing, packaging should provide necessary protection during transport in the smallest package.
- Adjust mail and shipping policy and procedures accordingly, update the SOP and train staff.
- Post the new USPS rate increase on bulletin boards, mail stops, and intranet to educate employees outside the mail center about the increase so they understand the rate changes and comply with any new policy changes.
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