The United States Postal Service filed notice earlier this year with the Postal Regulatory Commission (PRC) regarding a temporary price adjustment for key package products for the 2021 peak holiday season. This temporary rate adjustment is similar to one in 2020 that anticipated heightened peak-season package and shipping demand, which typically results in extra handling costs.
The planned peak-season pricing, which was approved by the Governors of the Postal Service on August 5, would affect prices on commercial and retail domestic competitive parcels – Priority Mail Express (PME), Priority Mail (PM), First-Class Package Service (FCPS), Parcel Select, USPS Retail Ground, and Parcel Return Service. International products would be unaffected.
Pending favorable review by the PRC, the temporary rates would go into effect at 12:00 a.m., Central Time, on October 3, 2021, and remain in place until 12:00 a.m., Central Time, December 26, 2021.
This seasonal adjustment will bring prices for the Postal Service’s commercial and retail customers in line with competitive practices.
From the UPSP about these changes: “Delivering for America,” the Postal Service’s 10-year plan for achieving financial sustainability and service excellence, calls for appropriate pricing initiatives. The Postal Service has some of the lowest mail postage rates in the industrialized world and continues to offer great values in shipping. These temporary rates will keep the Postal Service competitive while providing the agency with the revenue to cover extra costs in anticipation of peak-season volume surges like levels experienced in 2020. The forecasted additional revenue from the time-limited increase will depend on the volume of packages shipped between Oct. 3 and Dec. 26, 2021″ – the period the Postal Service historically considers its holiday peak season.
The planned price changes include:
Priority Mail, Priority Mail Express, Parcel Select Ground and USPS Retail Ground:
• $0.75 increase for PM and PME Flat Rate Boxes and Envelopes.
• $0.25 increase for Zones 1-4, 0-10 lbs.
• $0.75 increase for Zones 5-9, 0-10 lbs.
• $1.50 increase for Zones 1-4, 11-20 lbs.
• $3.00 increase for Zones 5-9, 11-20lbs.
• $2.50 increase for Zones 1-4, 21-70 lbs.
• $5.00 increase for Zones 5-9, 21-70 lbs.
Additional Planned Increases for the United States Postal Service
Product : Parcel Select Destination Delivery Unit (DDU)
Current: Starts at $3.30
Planned Increase: No change
Product: Parcel Select Lightweight (DDU)
Current: Starts at $2.15
Planned Increase: No change
Product: FCPS Commercial
Current: Starts at $3.01
Planned Increase: 30 cents
Product : FCPS Retail
Current: Starts at $4.00
Planned Increase: 30 cents
Product: Parcel Select Lightweight (DSCF and DNDC)
Current: Starts at $2.55
Planned Increase: $1.00
Product: Parcel Select DSCF
Current: Starts at $4.84
Planned Increase: $1.00
Product: Parcel Select DNDC
Current: Starts at $6.85
Planned Increase: $1.00
Product: Parcel Return Service
Current: Starts at $3.21
Planned Increase: $1.00
FedEx Announces Their Holiday Rate Increases For 2021
Kicking in November 1 with a $1.50-per-piece price hike for FedEx’s Ground Economy deliveries, FedEx starts the holiday season off for merchants with a not so merry notice.
The planned increase affects shipping to outbound residential deliveries for small and medium-sized businesses and covers low-weight, low-value, non-urgent deliveries – typical consumer package deliveries.
The November 1 surcharge expires on November 28, but will be then be upped to $3 per package November 29, and will last until December 12 to compensate for the higher volumes of Black Friday and Cyber Monday purchases. FedEx rate surcharges will then return to the $1.50 per piece increase from December 13 to January 16.
FedEx also announced a new on-going 60-cents-per-piece charge starting January 17, 2022, for retailers whose shipment volumes qualified for holiday surcharges.
UPS Announces Their Holiday Rate Increases For 2021
UPS has developed a pricing tier for the 2021 holiday shipping season based on merchant shipping volume.
This complicated grid is based on distinct variables such as shipments originating from China Mainland and Hong Kong SAR to the U.S.; shipments originating from Japan to the U.S.; shipments originating from Taiwan to the U.S.; shipments from Korea, Vietnam, Malaysia, Thailand, Indonesia, Singapore, Philippines, Australia, and New Zealand to the U.S.; shipments from Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, or United Kingdom to the U.S. and North America; and finally exhaustively any international shipment from all origins to all destinations, except shipments subject to the Peak Surcharges set forth in Sections A through E above, until further notice for the Service Levels and Peak Periods set forth below.
The pricing grid is so complex and confusing, that it is more important to review the document to ascertain what your shipping surcharge for the holiday will be. Visit the price grid.
UPS appears to now be structuring its price increase based on the merchant’s February volume in tiers. The tiers are 110% to 200% of February 2020 volume; greater than 200% to 300% of February 2020 volume; greater than 300% to 400% of February 2020 volume, greater than 400% to 500% of February 2020 volume; greater than 500% of February 2020 volume.
Any way, you look at it, shipping for merchants in the holiday season for 2021 will be more complicated due to Covid-19 and more expensive with new shipping volume surcharges.
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