USPS rolls out proposed 2019 rate increases

If approved, these price increases would take effect in January 2019

By ·

Proposed 2019 price increases were submitted by the United States Postal Service (USPS) to the Postal Regulatory Commission (PRC), an independent Federal agency that provides transparency and accountability of the U. S. Postal Service's operations, yesterday.

Should the Governors of the Postal Service approve these proposed USPS rate increases, they would take effect on January 27, 2019.

USPS said that its Mailing Services product prices, which include Letters, Letters additional ounces, Outbound International Letters, and Domestic Postcards would see an increase of around 2.5%

Of significant relevance to shippers are the proposed rate increases for USPS’s Shipping Services, with the USPS explaining that these price increases vary by product, with offerings like Priority Mail Express and Priority Mail pegged to increase by 3.9% and 5.9%, respectively. Unlike Mailing Services rate increase, which the USPS said are based on the Consumer Price Index, Shipping Services rates are primarily adjusted based on market conditions, it said, adding that the USPS Governors contend these proposed rate increases “will keep the Postal Service competitive while providing the agency with needed revenue.”

Some of the proposed Shipping price increases include:

  • Small Flat Rate Box, from $7.20 to $7.90, an 8.9% increase;
  • Medium Flat Rate Box, from $13.65 to $14.35, a 4.9% increase;
  • Large Flat Rate Box, from $18.90 to $19.95, a 5.3% increase;
  • APO/FPO Large Flat Rate Box, from $17.40 to $18.45, a 5.7% increase;
  • Regular Flat Rate Envelope, from $6.70 to $7.35, an 8.9% increase;
  • Legal Flat Rate Envelope, from $7.00 to $7.65, an 8.5% increase;
  • Padded Flat Rate Envelope, from $7.25 to $8.00, a 9.4% increase

What’s more, the USPS said that its First-Class Package Service, a lightweight expedited offering used mainly by businesses for fulfillment purposes, will shift to zone-based pricing in an effort to better align with the cost of service and improve value based on distance. 

Jerry Hempstead, president of Hempstead Consulting, said that this rate increase is fairly significant, but it comes with a few caveats.

“The PRC has to approve this, and the USPS has, on paper, been losing billions per year for many years and the current balance sheet is unsustainable,” he said. “The USPS does not lack volume. It lacks pricing that volume to cover the attributable costs for transporting and delivering those items (mail and parcel).”

In August, the USPS said fiscal third quarter earnings resulted in a net loss of $1.5 billion, which was roughly in line with the losses it has sustained on a quarterly basis over the last several years. USPS officials have cited a flawed business model imposed by law as the main reason for these ongoing losses. USPS Postmaster and CEO Megan Brennan said that the USPS supports support legislation under consideration in the current Congress which would provide immediate flexibility to the organization, allow the Postal Service to invest in its future and continue to provide the prompt, reliable, efficient and universal service the public expects.

Despite its financial travails, the USPS’s Shipping Services Group continues to post impressive volume and revenue gains, due, in large part, to its Parcel Services and Package Services groups, with these gains paced largely by the continuing growth of e-commerce, with the caveat that this subcategory is mainly a “last-mile” service that “bypasses much of our infrastructure and therefore is one of our lowest-priced package services, and as a result, produces a lower yield per piece when compared to many of our other services,” according to a Form 10-Q statement released earlier this year.

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

· All Topics
Latest Whitepaper
2018 Top 20 supply chain software suppliers
While the top of the list remains stable, up-and-comers are mixing up the software landscape with Cloud capabilities that traditional vendors are working to replicate.
Download Today!
From the December 2018 Modern Materials Handling Issue
EDC brought in a WMS, lights, powered conveyor and sortation to write a new chapter in the book distributor’s distribution story.
Educational Development Corp. writes a new chapter in distribution
2018 Top 20 warehouses
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Your 2019 Mobility Strategy: Creating a Plan for Device Security, Automation, OS Migration, and More
If you haven’t already started creating a mobile strategy for 2019, join us to get started. If you have a mobile strategy in place, we’ll be sharing our recommendations to make sure you’ve covered every aspect of devices, deployment, security, OS migration and more.
Register Today!
Resilience and innovation at Gap Inc.
Just months before the start of the 2016 holiday season, one of Gap Inc.’s distribution centers...
System Report: Luxottica keeps it simple
Simplification and consolidation drove the design of a new 1.1-million-square-foot logistics campus...

Goya Foods’ secret ingredient: Lift trucks
The leader in Hispanic food and beverage products puts a variety of lift trucks and racks to work in...
Arvato SCM Solutions: Fashion Logistics
At its Hannover, Germany, facility, e-commerce logistics provider Arvato SCM Solutions is using...