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The cash-strapped USPS is proposing to dramatically step up the fees for its last-mile Parcel Select service, raising rates by 9.3% for traditional packages (weighing over one pound), and 12.3% for lighter packages.
Many online retailers—as well as Amazon, UPS and FedEx—rely on the USPS for the last-mile leg of their parcel delivery chains.
It’s well known that the USPS is in dire need of a revenue infusion. USPS denies that the proposal is a direct response to months of vocal pressure from President Trump, who has been particularly calling on the Postal Service to increase or even double the fees it charges Amazon, and who in April ordered the creation of a task force to review the “unsustainable financial path” at USPS.
The proposal also includes an average 12.3% increase for its First-Class Package service. The USPS proposal can be read in full here (PDF).
Online retailers will take the biggest hit
If approved by the Postal Regulatory Commission, the new USPS hikes will go into effect January 2019. The hikes would amount to the latest in a series of cost increases that directly impact shippers’ bottom line, during an era when free shipping is rapidly becoming standard and expected by online shoppers, and when the ability to offer free shipping can make or break a sale.
For retailers with a brick-and-mortar presence, in-store pickup is an option increasingly favored by consumers, and one that relieves some logistical burden.
New recommended holiday deadlines
The Postal Service has also put out a list of recommended holiday shipping deadlines to ensure delivery by December 25, noting that “Thanks to more people shopping earlier and shopping online, the Postal Service’s ‘busiest day’ notion is now a thing of the past. Instead, the Postal Service now has a busiest time, and it starts two weeks before Christmas.” During that week—December 17 through December 23—the Postal Service expects to process 3 billion greeting cards and pieces of First-Class Mail.
The early deadlines start as soon as November 6 for certain services and address types.