Will Postal Service parcel rate hikes cause a shipper rethink?

The U.S. Postal Service has emerged, bloodied and more than a bit bowed, from the most difficult year in its long history. But beyond the COVID-19 pandemic, the presidential election and the tussles with former President Donald Trump lies an existential crisis for the Postal Service: how to remain viable when most of the macro-trend winds are blowing in its face.

First-class and marketing mail, the traditional cores of the Postal Service, continued their secular declines in 2020, a downward trajectory accelerated by the pandemic. The shipping and package business is currently the lone bright spot, and to capitalize on its growth and offset the costs of processing and delivering parcels, the Postal Service implemented a series of rate increases on shipper-centric products. The increases, which took effect Jan. 24, will reduce, through not eliminate, the Postal Service’s low-price proposition that e-merchants depend on to offer low- or no-cost shipping to end customers.

Some of the Postal Service’s increases appear to be relatively benign. Many are equal to just cents per piece. Commercial and retail rates for Priority Mail and its more time-sensitive cousin, Priority Mail Express, will rise by low- to near-mid-single-digit rates, hardly off-the-charts increases. Then there are, on average, 20% increases on shipments weighing less than 1 pound and moving via the Postal Service’s Parcel Select service, where parcels are delivered to residences after being inducted deep into the postal infrastructure.

Notify of
Inline Feedbacks
View all comments

Really, trying to blame President trump for the FAILURE of the Post Office? Now the PO has raised it’s rates, even after in many cases taking over 30 days to deliver a priority package? The PO will be it’s own worst enemy. To be clear, the PO failed in every way during the Christmas season and now it wants to blame President Trump? The PO should look in the mirror. Raising rates will destroy what little the PO has left.

Real parcel delivery and mail delivery is all slowed down because of Amazon, at least out here in our rural post office. They bring so much crap that during the Xmas season we couldn’t even move around the post office to sort it, they are often late delivering thus holding up all of the carriers,. They have so many parcels the job is nearly impossible, the PO is wasting money on second and third trips for carriers. Since they are no where near charging Amazon enough (it’s rumored to by 75 cents regardless of size and weight) the regular shipper… Read more »

Last edited 1 year ago by Sean Wolfe

Hmmm! they are doing it here too in Australia, to send a letter used to cost $3.20 yesterday today its $21 and you have to get this AED crap, I don’t think it’s Trump, a gut feeling this has all been preplanned to keep screwing small business, so the Corps are the only ones left….FFS!