No one can accuse the U.S. Postal Service of following the pack. It not only dismissed the strategy of pricing packages based on size as well as weight (referred to as dim weight pricing); it actually plans to lower prices for a good portion of its flagship Priority Mail products.

Few were surprised when UPS recently followed rival FedEx’s lead and announced it would price parcels based primarily on how much space they take up during transport. The new pricing scheme is expected to generate significant revenue for the two integrators. Industry observers were curious to see if the Postal Service would jump on the dim weight bandwagon, or if the agency saw a better opportunity in trying to poach customers with its simpler pricing scheme. Few predicted the Postal Service would lower prices.

Not all Priority Mail prices are going down, however. Retail prices on Priority Mail flat-rate boxes will in fact increase by 1.7 percent on average, if the Postal Regulatory Commission approves the Postal Service plan. For example, the small flat-rate box would increase 35 cents to $5.95 on September 7, if approved.

Still, small mailers could save by printing their own labels either from the Postal Service’s Click-N-Ship online offering, or from PC Postage products, permit imprints, or digital mailing systems. Using an online option moves customers into Commercial Base pricing, where they will get lower prices, on average, under the Postal Service proposal. The biggest price cuts – about 2.3 percent on average – would come in Commercial Plus prices, which require a commitment of 50,000 pieces in a year.

The Postal Service’s Priority Mail has seen solid growth over the past 3 years (25 percent in revenue). But postal officials have indicated they want to capture more business shippers and this price cut is one initiative meant to attract those commercial customers. Some observers think that, even without the proposed price break, the Postal Service would have won customers from UPS and FedEx once their prices increased. But others suggest the reduced rates might entice even more business customers to try the Postal Service.

Should the Postal Service lower its Priority Mail prices, keep them the same, or raise them slightly given an expected migration from UPS and FedEx? 

Comments (16)

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  • anon

    Most residences will probably spend 3-4 times the amount they want to pay to ship a 1st class small package by using Priority online, since Click N Ship was discontinued for small mailers. Why? It's easier than standing in the line at Post Office. I found that I can use the postage machine in the lobby (available 24/7) to print exact postage needed for 1st class. No tracking, but don't have to wait. Post Office should restore the Click N Ship feature for all to use, not just the bulk mailers.

    May 15, 2017
  • anon

    I used to use Clik-n-ship for my personal packages, but with the new retail prices, it's less expensive to go to the post office and send parcel select instead of Priority Mail. I love the service I receive as a commercial customer going through eBay, and don't understand why the click-n-ship commercial (discount) rate was removed on-line. I'll have to stand and line along with the others who used to use this service, but I can't afford retail PM for personal mail to my kids and grand kids in TX and WA. I guess someone thought this was a good idea, but it's not going to increase revenue from me and the poor clerks will have even more to do than before. Typical short-sighted thinking by someone in the government.

    Dec 06, 2016
  • anon

    Disappointed with no more discounts for ship n click. I really don't understand this as now I am talking my packages to the window which uses up a Window clerk's time instead. guess they think that time is cheaper but I hardly think so! Wonder what executive thought up this idea? They ought to be ashamed of themselves for even showing the click N ship prices next to the actual price! No wonder the USPS is in trouble!

    Jun 06, 2016
  • anon

    I used to use Click N Ship for my small business, shipping out hundreds (1000's?) of packages annually. But without the discount, I'm not going to do the Postal Service's job for them. I hope they use that extra income to hire more clerks, because each time I go into the post office now I create a long (angry) line - I love it!

    Apr 06, 2016
  • anon

    Only just found out that there are no more online discounts and so I will not be using ClickN'Ship any longer. It isn't worth wasting my time, effort and resources for nothing.

    Mar 18, 2016
  • anon

    I have used the Click-n-Ship faithfully and happily for several years - until February 2016 when I used it to ship five large Priority packages to family members and discovered that USPS no longer offers any savings to customers who print and pay for their parcels online. Customers now pay the same rate online as they would if they took their packages to the post office to have a USPS clerk process them. Eliminating the discount removes the incentive to use Click-n-Ship. From now on, I'll just take my packages to the post office and let THEM do the work.

    Feb 05, 2016
  • anon

    No more regional rates?

    Jan 22, 2016
  • anon

    No more discounts on click n ship as of Jan 17, 2016! They are now charging full retail prices to print a label through USPS Click n Ship! We weigh the package, print labels using our paper, ink and time instead of using up a clerk's time at a brick and mortar post office but no longer get any discount at all. I am very surprised by this change and feel it is unfair. I am looking at alternatives and will not use click n ship again.

    Jan 19, 2016
  • anon

    In my opinion, prices for postal services available to consumers online should also be available at the post office for consumers who either do not own or know how to operate a computer. The parcel select service available online is cheaper than standard post available at the post office. Equal pricing for all!

    Oct 10, 2015
  • anon

    I never recieve any packages at my home and as it looks the postal worker does not bring the package out they just put the "sorry we missed you " paper in with the other mail. I would like to know if this is some new thing where the postal carriers don't have to deliver packages that people pay for and still keep their jobs. Is it easier not to deliver the packages and the day goes faster. Yet, the consumer looses because they spend a lot of time trying to track down packages that either stay in lembo or get returned to sender. Many people depend and support the postal service but, for me it has let me down. I now have to ask people that don't live in my area can I have my packages delivered to their homes because that way I will know that I will recieve my package.

    Jul 28, 2014
  • anon

    I work in a Priority plant. We receive tons of "Flat Rate" boxes containing anything from rocks to ceramic tile and bullet casings. WRAPPED IN DUCT TAPE!!! Having these put on the machine to sort is causing a lot of damage to the packages that are at the bottom of the sack!! How much insurance money os paid out to damaged items due to these heavy packages? It's insane!!

    Jul 19, 2014
  • anon

    I asked this before but no one was listening so I will try again--who are you trying to fool by saying the Postal Service does not price parcels using DIM weight? This is done EVERY day, and dimensions of parcels are even required for click and ship parcels mailed on line. Stop trying to pretend the USPS didn't follow the pack. It started the idea!!!!!! The only problem now is drop shipments. Previously Fed EX and UPS were drop shipping their large parcels for last mile delivery at the Postal Service for carriers to deliver and no DIM weight postage was being collected. Now they will collect this and STILL drop the large parcels without giving any additional funding for these last mile parcels to the USPS. Now if you still don't think the Postal Service charges DIM weight, carry a big lightweight box to the post office and watch the clerks measure it and pay extra to mail it.

    Jul 19, 2014
  • anon

    I agree! We started the DIM thing. Why else do think we measure stinkin' parcel? And I agree about UPS and Fed collecting more money and laughing all the way to the bank at us. Whoever did this report should have done their homework.

    Aug 02, 2014
  • anon

    I am extremely happy with my service. It seems each time I send a package, it gets there early than anticipated. This time I was sending a birthday gift to a 7-yr-old by priority mail and was afraid I didn't send it in time. Not only did it get there in time, it got there a day early. Good work!

    Jul 18, 2014
  • anon

    I would much rather do business on my computer at home and not have to drive to a post office. Why should I wait in a line at the Post Office when I want to mail a package. I can save time and money. I can do it 24/7 and also save even more money on postage with clip and ship. It is a no brainer!!

    Jul 15, 2014
  • anon

    Does anybody remember when Scully took over Apple computers? He changed their pricing structure. In the begining no matter how many computers you bought the price was the same. All Apple customers were on the same footing. There were computer stores all over with knowledgeable staff who helped people join the information revolution. As soon as "big" buyers got price breaks the little guys disappeared. I believe that USPS should have one pricing scheme for all. It seems that usps is trying to court the big shippers by using discounts (giving away profits) and stepping on the little guys ( adding profit). Where is the growth which USPS is looking for? It is the little guys who will become the next big guys. Court them and see REAL growth.

    Jul 15, 2014

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