• on Nov 25th, 2013 in Pricing & Rates | 1 comment

    Imitation is the sincerest form of flattery, they say. Maybe so. It’s just not usually FedEx that is doing the imitating or the flattering. But with its new “simple and predictable” flat rate shipping option, FedEx seems to be trying to look like the U.S. Postal Service in one particular way.

    The FedEx One Rate bears more than passing resemblance to the popular Priority Mail Flat Rate, suggesting FedEx is shifting strategy to become more aggressive in the light-weight retail package segment it once largely ceded to the Postal Service.

    And yet, the products aren’t identical. For one thing, FedEx One Rate isn’t quite as simple as Priority Mail Flat Rate. Unlike Priority Mail Flat Rate, One Rate has weight limits: 10 lbs. for an envelope and 50 lbs. for a parcel. It also charges based on distance across three zones of travel. Your package is going through more than one zone? You’re paying more.

    Then again, FedEx One Rate comes with free packaging, like Priority Mail, and FedEx is waiving some – but not all – associated surcharges, like residential and fuel surcharges. Customers who find that surcharges add significantly to the shipping cost will likely smile.

    All in all, customers should be well-served by having another retail shipping option this holiday season. The National Retail Federation expects retail sales in November and December will rise 3.9 percent over last year to $602 million - $738 per shopper – and some of those purchases will certainly be gift-wrapped and put in a shipping box.

    While the FedEx product appears less simple, it could have other features that customers might prefer. A customer might find the hours at a nearby FedEx Kinko’s more convenient than the local Post Office. And, FedEx’s enduring image as a reliable shipper might make FedEx One Rate more appealing to some. Still, others might prefer the simplicity and certainty of the Priority Mail Flat Rate, with its one-price-goes-anywhere approach. Too early to tell.

    But maybe you can give us an idea:

    • What are your holiday shipping plans this year?
    • Do you plan to use one of these simplified packaging products?
    • Does convenience outweigh simplicity? Or vice versa?
    • What other retail package services would you like to see? 
  • on Sep 26th, 2013 in Pricing & Rates | 9 comments

    The U.S. Postal Service’s governing body, the Board of Governors, voted this week to request permission to raise postage prices above the inflation-based price cap to generate $2 billion in revenue in 2014. It is asking the regulator, the Postal Regulatory Commission (PRC), to allow the Postal Service to raise the price of a stamp by 3 cents (to 49 cents), which is 2 cents more than the annual inflationary increase. Prices on other single-piece and commercial mail products would also increase. This request is known as an “exigent” price increase because it will exceed the statutorily mandated price cap that is tied to growth in the Consumer Price Index (CPI).

    By law, the Postal Service can only raise prices on its market-dominant products, such as First-Class Mail, advertising mail, and magazines, by the annual growth in inflation. The law allows it to ask the regulator for a price increase above inflation for “exceptional or extraordinary” circumstances. In a public letter to customers, Board Chairman Mickey Barnett described the “precarious financial condition” of the Postal Service and the “uncertain path toward enactment of postal reform legislation” as primary reasons for seeking price changes above inflation. Barnett said if comprehensive postal reform legislation were to pass, the Postal Service would reconsider its pricing strategy.

    The Postal Service filed for an exigent price increase in July 2010, saying the economic recession was an exceptional circumstance that threatened its viability. The PRC rejected the proposal and the Postal Service challenged the rejection in federal appeals court. The court remanded the original case back to the PRC, but at that time, the Postal Service did not pursue it.

    If the PRC were to approve this current request, the Postal Service would raise prices on January 14, 2014. On average, postage rates would increase 5.9 percent – or 4.3 percent above CPI. Mailer groups are expected to oppose the exigent price increase. The PRC has 90 days to issue an opinion on the Postal Service’s exigent price increase proposal.

    What do you think? Share your thoughts on the proposed exigent price increase.

  • on Feb 18th, 2013 in Pricing & Rates | 6 comments

    After more than 20 years of service, the venerable POSTNet barcode on envelopes for automating and sorting mail retired on January 28. The Postal Service now requires that mailings have at least Basic-Service Intelligent Mail barcodes (IMb) to qualify for automation discounts. Mailers will need to switch to Full-Service IMb by January 2014 to receive maximum discounts at that time. Even though the Postal Service provided a lengthy lead time and a good deal of education on the discontinuance of the POSTNet barcode, the IMb requirement undoubtedly caught some smaller mailers by surprise. At the start of the New Year, less than half of commercial mail contained an IMb, suggesting a sizable number of mailers still needed to make the switch. While large commercial mailers were early adopters of IMb, many mid-sized and smaller mailers were hesitant to make the commitment and investment. Basic-Service IMb is not as big a step as the move to Full-Service IMb but it also yields fewer benefits. Full-Service Intelligent Mail will allow mailers to receive richer data about their mailings, but requires them to invest in hardware and software changes. The Postal Service wants to give mailers an incentive to make the conversion. It has proposed a one-time credit ranging from $2,000 to $5,000 to customers that make the conversion to Full-Service IMb. The credit would be based on the number of pieces the customer sends in a year. In an October Federal Register notice, the Postal Service laid out its proposal and further details are expected in a final rule. Is an incentive necessary to get mailers to invest in Full-Service IMb? If you are a mailer, do you plan to take advantage of the incentive?

Pages

This site provides a forum to discuss different aspects of the United States Postal Service and how it can be improved. We encourage you to share your comments, ideas, and concerns.

This is a moderated site—we will review all comments before posting them. We expect that participants will treat each other with respect. We will not post comments that contain vulgar language, personal attacks of any kind, or offensive terms that target specific individuals or groups. We will not post comments that are clearly off-topic or that promote services or products. Comments that make unsupported accusations will also not be posted.

We ask that reporters send questions to the USPS OIG Media Office through their normal channels and refrain from submitting questions here as comments. We will not post questions from reporters.

We recognize that the Web is a 24/7 medium, and your comments are welcome at any time. Given the need to manage Federal resources effectively, however, we will review comments and post them from 9:00 a.m—5:00 p.m Eastern Time, Monday through Friday. We will read and post comments submitted after hours, on weekends, or on holidays as early as possible the next business day.

To protect your own privacy, and the privacy of others, please do not include personal information or personally identifiable information such as names, addresses, phone numbers or e-mail addresses in the body of your comment.

Except when specifically noted, any views or opinions expressed on this forum (or any other forums available via an RSS feed) are those of the individual bloggers. The views and posted comments do not necessarily reflect those of the U.S. Postal Service Office of Inspector General, or the Federal government.

Thank you for taking the time to read this comment policy and disclaimer. We plan to blog weekly on as many emerging new media topics as possible. We encourage your participation in our discussion and look forward to an active exchange of ideas.