April 18, 2008, 12:00 AM

Postal Service launches rate increases and incentives

Under a new strategy intended to make it more competitive with other shipping companies, the U.S. Postal Service is rolling out a new rate schedule effective May 12 with a combination of higher rates and incentives for lowering costs.

Katie Evans

Managing Editor, International Research

Under a new strategy intended to make it more competitive with other shipping companies, the U.S. Postal Service is rolling out a new rate schedule effective May 12 with a combination of higher rates and incentives for lowering costs.

Taking advantage of a law passed by Congress in 2006 that gives the U.S.P.S. increased flexibility to set prices, the Postal Service will offer zone-based pricing with lower rates for those who ship in volume or help the Postal Service cut costs by dropping off packages at bulk mail centers. “For the first time, we’ll be offering pricing incentives to make us more competitive with other shipping companies,” a Postal Service spokesman says.

Shipping rates for Priority Mail and Parcel Select, two U.S.P.S. services commonly used by online retailers to ship parcels weighing up to 70 pounds, will rise on average 6% and 5.7%, respectively. But Priority Mail, used to deliver products typically within two to three days, will offer lower rates to shippers who use services such as the Postal Services’ online Click-and-Ship pick-up scheduling service and PC Postage online postage services from third-party vendors like Endicia and Pitney Bowes, the spokesman says.

For Parcel Select, which allows shippers to bring products to either a local post office or a bulk mail center, customers will be able to get reduced rates based on volume and also for bringing packages directly to a post office, or direct delivery unit, instead of a bulk mail center.

For package returns, the U.S.P.S. is raising the average overall rate by 2.2%. But it will offer discounts for packages returned to a direct delivery unit instead of a bulk mail center, the spokesman says.

 

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