January 23, 2012, 5:17 PM

The U.S. Postal Service raises rates

First Class Package Service now includes free delivery confirmation.

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Shipping rates for all U.S. Postal Services packages have gone up starting this week, with increases ranging from 2.1% to 4.6% and higher hikes for international shipping.

Rates for what the shipping carrier calls its market-dominant classes of shipments have increased by 2.1% on average. These include standard mail, shipping books or music through media mail, and first class mail, a popular method for shipping smaller items, as packages are charged per ounce, as opposed to per pound. Priority Mail, Express Mail and Parcel Select rates have increased 4.6% on average.

A five-pound shipment of books through media mail now start at $4.15, compared with $4.05 last year. And for Parcel Post shipments, common among retailers shipping non-media items heavier than one pound, prices start at $5.20 and up for one pound and $7.29 for five pounds.

This year’s increases for U.S. Postal Service shipments are smaller than those for UPS, which has announced an average 4.9% hike, and FedEx, which has announced a 5.9% increase.

The U.S. Postal Service has rolled out several new products for retailers, including an Intelligent Mail bar code that can be added to first class mail items for tracking purposes. This tracking service is now free for first class items, while previously it cost 19 cents per shipment. It has been free for priority mail items for years, says Vivian Li, marketing brand manager for Dymo Endicia, which helps retailers manage U.S. Postal Service electronic postage.

This could be especially beneficial to retailers that ship many packages, Li says. ”19 cents may not seem like a lot, but it adds up. One of my clients is saving $5,000.”

The U.S. Postal Service also has a new, larger Express Mail Flat Rate box. Retailers can pay a flat rate of $39.95 for one- or two-day delivery of a 0.35 cubic foot box that weighs up to 70 pounds. 

Also, retailers that ship with the U.S. Postal Service may have an easier time getting bulk discounts on shipping, as the threshold to be considered for Commercial Plus Cubic pricing has dropped from 250,000 shipments per year to 150,000, Li says. This method charges retailers by the volume of their shipment, as opposed to weight, so it could be especially beneficial for retailers that ship a lot of small, heavy items like car parts or electronics.

Companies that help retailers work with the Postal Service like Dymo Endicia or Stamps.com suggest retailers look into electronic postage, as it’s cheaper than retail prices they would pay otherwise. “The gap between online and retail pricing in growing,” Li says. “For priority mail, for example, the gap is 6.8%. Express mail is more than that, and it’s up to 15% on the international side.”

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