Recently, the USPS proposed a record price increase. If approved, which is expected, the higher rates will go into effect on Jan. 27, 2019. This will be the biggest rate increase in USPS history. Amazon’s retail operating income would take a 5 percent hit from shipping cost inflation if the new rates take effect, according to Barclays.
Here are some of the significant proposed 2019 USPS Shipping rate changes:
- The elimination of Commercial Plus Pricing (CPP), where now Priority Mail pricing will match Commercial Base Pricing (CBP). Many e-commerce and subscription trade shippers will be facing a painful price increase with the elimination of CPP programs.
- A conservative 5.9 percent Priority Mail increase is expected, while First Class Flat Pricing will change to zone-based pricing with an expected 11.9 percent increase. For shippers with a high proportion of outer zone shipments, the increase will be appreciably higher (as much as 21 percent).
- Perhaps most concerning is the pending reaction of UPS and FedEx as they re-evaluate their “hybrid” postal delivery products that use the USPS for last-mile delivery. Buried in the postal rate change are increases ranging from 9 percent to 30 percent on the work-share rate structures used by UPS and FedEx.