USPS Rate Increases, No Saturday Delivery Could Lead to Changes for Many Small Businesses

Monday, February 11th, 2013

The United States Postal Service recently enacted some higher shipping rates for both domestic and international mail. It has also offered some new rules and shipping options that might have an impact on the way many small businesses send mail and shipments.

First class stamps now cost 46 cents, up one cent from the rate that went into effect in January 2012, and each additional ounce will cost an extra 20 cents. International 1 ounce envelopes now cost $1.10, and postcards have increased by 1 cent to 33 cents.

There is also new pricing in place for Priority Mail Flat Rate products, ranging from $5.60 for a regular envelope to $16.85 for a large box. In addition, free tracking services will now be offered with all competitive packages, including Priority Mail and Standard Post, which has replaced Parcel Post.

Businesses that send higher volumes of mail may also want to look into the Intelligent Mail barcode, a barcode that helps track and process mail. This barcode is now mandatory for mail to qualify for automation pricing, which can be up to 47% less than retail rates. Shippers can print their own barcodes for outgoing mail or have the USPS add it. And on top of the lower rates, the Intelligent Mail barcode lets you monitor your mail as it makes its way through the postal system, so that you can respond accurately to customer inquiries.

Clearly these rate hikes, which went into effect on January 27, can have a large impact on certain types of small businesses that ship products or use postage as part of a marketing strategy.

Justin Amendola, VP of Global SMB Digital Strategy at Pitney Bowes, a company that provides customer communication technologies to businesses, said there are a few things businesses can do to minimize the impact of additional shipping costs.

First, businesses can use online postage solutions for shipping so that they’ll qualify for commercial-based rates from the USPS. Amendola also said that using flat rate shipping options can help businesses save between 19% and 36%. And he suggested that businesses should sort through their mailing lists and remove outdated addresses or customers so that money isn’t wasted sending items to customers who aren’t even there.

Lastly, he suggested that businesses switch from the new Standard Post option to Parcel Select, a commercial option that offers savings on ground delivery and convenient pickup options.

“Standard Post is only available over-the-counter at USPS retail locations, so you’ll lose out on the efficiencies gained by printing your own postage.  Instead, switch to Parcel Select and save on every shipment.”

FedEx and UPS have also recently announced increased rates for the new year. None of these announcements are uncommon, as both companies along with the USPS have announced increased prices for each of the last several years, in an effort to make up for inflation and other added costs.

The USPS has also recently added some  innovative technology options for small businesses, such as Every Door Direct Mail and a redesigned Click N ship site.

For several years, the United States Postal Service has been talking about the possibility of doing away with mail delivery on Saturdays in order to help balance its budget. Congress and the American public have debated whether or not this change could have a negative impact on consumers and businesses.

The USPS has also officially announced that mail will no longer be delivered to residential addresses on Saturdays beginning the week of August 5, 2013. Packages will continue to be delivered on Saturdays, and Post Offices that currently have Saturday hours will remain open, some with limited hours, to sell stamps and accept packages for shipping. Mail to PO boxes will also continue to be delivered on Saturdays.

Since package delivery remains a more profitable part of the business than traditional mail, businesses like online retailers that ship products to consumers shouldn’t really be affected by this change.

But for other types of businesses, like those that use direct mail for marketing purposes, cutting Saturday delivery could potentially have more of an impact. However, since mail will still be delivered Monday through Friday, any potential negative impacts from the new schedule should be minimal.

The USPS has been contemplating cutting Saturday delivery for some time, due mainly to loss of business from email and other forms of digital communication, as well as competition from private carriers like FedEx and UPS.

The Postal Service expects that this measure will help to save about $2 billion annually, once the new schedule has been fully implemented.

The USPS is a self-supporting government enterprise, and the only delivery service that reaches every address in the nation. In addition, the Postal Service receives no tax dollars or government funding for running its operations. Post Offices are funded by the sale of postage, and its other products and services.

Courtesy: Small Biz Trends