'Tis the season of the USPS price hike.
The United States Postal Service (USPS) is set to adjust its pricing structure for multiple shipping services, effective January 21, 2024.
What does this price structure adjustment mean, and how will shipping options be impacted? We have the answers. Read on for a detailed analysis of the planned pricing adjustments and how they might impact businesses next year.
Topics covered in this article:
- The 2024 USPS price adjustment
- USPS Ground Advantage rate increase
- Priority Mail & Priority Mail Express rate increase
- Changes in merchant rate card prices
- Increase for USPS stamps & postcards for 2024
- The impact on holiday shoppers
- How the USPS price hike compares to other shipping service providers
- The reason for the 2024 price hike
- The long-term strategy
- USPS is still one of the most affordable shipping options
- How to save money & eliminate price hike headaches
The 2024 USPS price adjustment
The USPS plans to implement a price increase across several shipping services, including USPS Ground Advantage, Priority Mail, and Priority Mail Express. Here’s a breakdown of the expected increases for 2024 …
USPS Ground Advantage rate increase
The USPS Ground Advantage, a product that promises delivery within two to five business days across the continental U.S., is expected to have a rate increase of approximately 5.4% in 2024.
The USPS launched Ground Advantage in July 2023 as their flagship ground package service. It replaced shipping services like First-Class Package Service, Retail Ground, and Parcel Select Ground.
About Ground Advantage
Even with the impending price increase, the USPS is keen to highlight Ground Advantage's value. With the inclusion of $100 insurance and free pickup on the carrier’s route, USPS Ground Advantage remains a strong competitor to similar offerings from FedEx and UPS.
Priority Mail & Priority Mail Express rate increase
Similarly, Priority Mail and Priority Mail Express services, which tout delivery within one to three business days and next-day or two-day delivery, are set to experience price increases of 5.7% and 5.9%.
However, it is important to note that the USPS’s same-day and next-day local delivery service, Connect Local, will not be affected by these price increases.
Changes in merchant rate card prices
In addition to shipping services, the USPS is also updating the prices on its Merchant Rate Card on e-commerce platforms that are part of its Connect eCommerce program. This program offers discounted pricing for shipping.
Increase for USPS stamps & postcards for 2024
The USPS has also filed notice with the Postal Regulatory Commission for rate increases for First-Class Forever stamps, domestic postcards, and international letters. If approved, the new rates would come into effect on January 21, 2024. The new rates would include a 2-cent increase for the First-Class Forever Stamp, bringing the cost to 68 cents (up from 64 cents).
The 2024 price hike will not impact holiday shoppers
The 2024 rate increases will not take effect until … 2024. Therefore, you don’t have to worry about the new prices until next year. Therefore, this year’s holiday season will not see any impact of these proposed price hikes.
How the USPS price hike compares to other shipping service providers
USPS’s decision to raise rates follows similar actions taken by other major carriers, such as UPS and FedEx, who announced an average increase of 5.9% earlier in the year.
Despite this, the United States Postal Service continues to position itself as an affordable alternative to these top-tier carriers. USPS also aims to make its pricing structure as upfront as possible and does not include additional surcharges for residential and regular Saturday delivery or fuel.
The reason for the 2024 price hike
The USPS has been grappling with financial issues for some time now. It reported a net loss of $6.5 billion in the fiscal year 2023, which ended on September 30. An additional factor that has contributed to this loss is inflation. Inflation has been “the big bad” for many businesses this year, not just USPS. For example, Xero reported that 48% of small business owners in the U.S. have experienced an extreme or high impact from inflation on their cash flow in the past six months.
So, USPS’s justification for these price adjustments is that it is a necessary step towards achieving financial stability.
The long-term strategy
USPS’s financial challenges and the decrease in demand aren’t stopping it from seeing its package business as a crucial part of its long-term strategy. Quite the contrary. It aims is to increase the USPS’s share in the parcel delivery market:
“We aim to reduce costs by improving our operational precision and deploying modern-day logistics strategies. Our goal is to compete for a growing share of the package market,” stated Postmaster General and CEO Louis DeJoy.
USPS is still one of the most affordable shipping options
Despite the price hikes, the USPS remains among the most affordable postal services globally. It is also worth noting that even with the proposed rate increases, USPS prices will still be one of the most affordable shipping options out there.
Save money & eliminate price hike headaches - with a shipping software
In 2023, the USPS implemented two price hikes, just like they did in 2022. Therefore, it can be inferred that 2024 will follow a similar pattern: one price increase in January and another in July.
If you want to help keep USPS prices from increasing and taking more from your profits, it is worth exploring shipping software. Shipping software can help lower your USPS shipping rates by ensuring you get discounted shipping rates. It can also streamline your operations and help optimize your fulfillment processes.
Shipping software like Zenventory can also save you money by giving you access to the lowest commercial rates with USPS out there.
The USPS’s decision to raise prices is a strategic response to financial challenges and market conditions. While the increase may seem significant, the USPS continues to offer value for money with its affordable, upfront pricing and absence of surcharges. As consumers and businesses adapt to these changes, the USPS remains committed to delivering reliable and cost-effective postal services.
However, if you are tired of continuous price adjustments, shipping software like Zenventory can help you save money by getting you access to the cheapest USPS rates out there. Book a demo with one of our product experts to learn more about how shipping software can help you and your business.