Merry Christmas from the United States Postal Service to you!
Shipping rates for shipping packages through USPS will cost more this holiday season. This is not welcome news for millions of small businesses across the nation that are already reeling from Coronavirus pandemic shutdowns. Some states still have businesses closed or open but crippled by limited hours and restrictions on the number of customers allowed in their establishments. Increased spending for extra cleaning supplies, masks, gloves, and other coronavirus related expenses will already be a strain for the reeling business owners and now this.
It is widely known that the postal service operates on a business model that is not sustainable. The failing business model can not be changed without Congressional approval. The USPS is a self-funded agency that does not receive any money from the government. It has been on an accelerated financial downward spiral since 2006 when the United States Congress passed a law requiring the postal service to pre-pay its retiree’s health benefits. The legislation was also passed to limit the increases in letters and circulars, capping any the inflation rate. According to the USPS website, the net loss for the 3rd quarter of 2020 “was $2.2 billion compared to a $2.3 billion net loss for the same quarter last year. The controllable loss for the quarter was $1.5 billion, compared to a controllable loss of $1.1 billion reported for the same quarter last year.”
The pandemic was actually a good thing for the postal service financially. The shutdowns of almost every U.S. business gave rise to a flood of online shoppers. During quarantine, people stuck in their homes turned to Amazon, Wayfair, Etsy, and other eCommerce sites to replace their normal brick and mortar favorites. This business increase was not even close to being enough to save the failing agency from a huge loss.
Chart showing the temporary price changes:
|Parcel Select DestinationDelivery Unit (DDU)||Starts at $3.19||24 cents|
|Parcel Return Service||Starts at $3.05||24 cents|
|Parcel Select Lightweight||Starts at $1.81||24 cents|
|FCPS Commercial||Starts at $2.74||25 cents|
|Priority Mail Commercial||Starts at $7.02||40 cents|
|Parcel Select Ground||Starts at $6.92||40 cents|
|Parcel Select DSCF||Starts at $4.37||40 cents|
|Parcel Select DNDC||Starts at $5.98||40 cents|
|Priority Mail Express Commercial||Starts at $22.75||$1.50|
Some rate cells in Parcel Select Ground will be charged less than $0.40 so as not to exceed USPS Retail Ground retail prices:
- 19 lbs., zones 8/9 – the increase will be zero instead of $0.40
- 20 lbs., zones 8/9 – the increase will be $0.06 instead of $0.40
- Oversized – the increase will be zero instead of $0.40
While these changes may help keep the USPS afloat through 2020, major permanent changes will need to be made soon to sustain this vital service for the American people. Rumors have been circulated that Amazon is seeking to replace the USPS as their delivery vehicle with its own shipping network. This would be accomplished using “Amazon delivery centers.” Delivery centers are like hubs where packages are received from sorting facilities via Amazon delivery trucks and then distributed locally. The number of Amazon delivery centers increased from 163 in 2019 to 278 in 2020, with an estimated 415 locations in operation by the end of the year.
The USPS rate increases go into effect at midnight, October 18th.