Parcel Shippers: New USPS Priority Mail Undercuts UPS and FedEx Pricing!
And when you add in FedEx and UPS’s fuel and residential surcharges, the delta becomes even more dramatic (see table three below):
Shippers should do their own comparisons since UPS and FedEx discounts, minimum charges, fuel surcharges, custom dimensional pricing and other charges vary.
More Favorable Dimensional Pricing Policies
Another important differentiator for the USPS has to do with dimensional pricing. FedEx and UPS are revising pricing policies for ground packages, moving from weight-based to pricing based on package size starting in 2015. Currently, both parcel carriers only apply dimensional weight pricing to ground packages measuring three cubic feet (5,184 cubic inches) or greater. The elimination of the three cubic foot exception is effective Dec. 29, 2014 for UPS, and Jan. 1, 2015 for FedEx.
For Priority Mail, the price is a combination of weight, size and how far the package is traveling. Priority Mail pieces weighing less than 20 pounds and measuring more than 84 inches, but 108 inches or less in combined length and girth are charged the price for a piece weighing 20 pounds. This is commonly referred to as a “balloon price.” The balloon price applies to pieces addressed for local delivery and to zones one through four.
Length is the measurement of the longest dimension and girth is the distance around the thickest part (perpendicular to the length). Priority Mail pieces that exceed one cubic foot and are addressed to zones five through eight are subject to “dimensional weight pricing.” In general, if a piece is large and relatively light for its size, it’s subject to dimensional weight pricing. Items mailed in USPS-provided Priority Mail Flat Rate packaging are charged the same flat rate regardless of weight (up to 70 pounds) and domestic destination. Commercial prices are available for postage paid through Click-N-Ship and authorized PC Postage vendors.
Rob Martinez is the CEO of Shipware LLC, a professional services firm that transforms businesses through intelligent distribution solutions and strategies. Rob has helped some of the world’s most recognizable brands reduce parcel shipping costs an average of 25 percent through contract negotiations, rate benchmarking, modal optimization, invoice audit and other savings vehicles. A cum laude graduate of UCLA, Rob has 20 years of transportation industry experience, including executive positions at DHL and Stamps.com, in addition to his work as an outside consultant since 2001.