USPS will be making the following changes January 27.
USPS First Class packages are increasing an average of 11.9%*
Note that USPS First Class Package Service pricing will change from a flat rate per ounce to zone-based pricing per ounce
USPS Priority Mail increases an average of 5.9%*.
Changes in weight distribution of packages will affect pricing on USPS packages starting in June.
The eBay shipping calculator and eBay labels are updating as rate changes take effect. Make sure you adjust shipping prices on your active listings accordingly.
If you offer free shipping, review your listings to see if your prices can absorb the extra costs, or if you should make adjustments.
If you use calculated shipping, review your listings for accurate package weights and measurements. Your listings will show the new rates automatically, once they take effect.
If you charge a flat-rate for shipping, review your listings to see if your flat rate covers the price increases. You may have to raise your flat-rate charges to maintain your margins.
This is the worst part for me. It’s easy to remember how much the first 4 oz cost and then each incremental ounce. I had values in mind for each common weight that I’d ship. <4, 8, 10, 16 oz. Remembering that for all the different zones sucks and likely just won’t happen though. It also makes it so a single listing will have a different profit depending on where it sells.
I mean it makes logical sense that it should cost me more to ship a card across the country to CA than across the state to NY, but it’s just so clean and nice that way when figuring costs and that’s how stamps work too. Oh well.
You would think that’s how it works, but this pricing structure actually plays on that idea without any of the practical underpinnings.
The USPS is designed with core hubs scattered across the US. There is a never-ending fleet of air mail being piped between them. For 90%+ of mail, there will be a movement like this:
Local PO > Distribution Center Nearest Origin > Distribution Center Nearest Destination > Sort Center > Local PO > Doorstep
We know from the appeals USPS made to Congress during the gas price crisis (they wanted fuel surchages) that their air mail never exceeds the capacity of the planes and rarely exceeds 50% of the capacity of the planes. This, along with the realities of transit-based business, create the situation the USPS is in where the raw acts they perform of moving mail are a small fraction of their costs. The expense is people. When they collect your mail, sort your mail, move your mail, sort your mail again, and deliver your mail, the most expensive element is human labor over and over and over.
The zone-based system does have variations in human labor costs, but they’re charging you based on proximity. When in reality, there is a negligible difference in their cost based on proximity. A system of expenses based on their actual system would punish remoteness, not distance, insofar as domestic operations are concerned. The most expensive place I can ship for USPS is not California, being on the East Coast myself. It’s rural Kansas.
Because the USPS has an ongoing obligation to the US government where, in exchange for certain protections, they provide mail to every person in the US regardless of destination, their highest cost and most labor-demanding (see: cost ineffective) destinations are those which are isolated away from traditional delivery networks.
tl;dr USPS raising their rates and introducing zone pricing isn’t because packages move further away and cost more. It’s because that’s what we assume is the case. And what we believe is an opportunity for them to profit.
Man I remember shipping for $2.50 which didn’t seem like long ago at all. Looks like I’m going to start organizing into large lots and singles that can just go PWE. Feels bad getting $14 on a $20 sale
They actually did once. Just once and likely never again though. It was a temporary increase voted in by Congress that was actually allowed to expire after 2 years. A couple more years later and they revisited the price. Honestly it would have made more sense to never do that rollback and just delay the future increase. The USPS is an odd animal with it’s semi governmental ownership.
If they keep on increasing the rates, pretty soon it will be no decision between using them, and going with the better shipping company like FedEx or UPS.