U.S. Postal Service Proposes Temporary Holiday Price Increase
The U.S. Postal Service filed a notice Wednesday of a temporary price hike for this year’s peak holiday season, which it said would help cover extra handling costs. The agency said the adjustment was approved by its board of governors and is now pending review by the Postal Regulatory Commission. The price increase would go into effect on Oct. 2 and remain in place until Jan. 22, 2023. The price increases depend on the weight of the package and the distance of the delivery. Commercial priority mail packages will see a 75 cent hike, and heavy, long-distance deliveries could see increases of up to $6.50. You can find all of the details here.
Total Retail's Take: Retailers already dealing with the effects of inflation across their businesses may soon have another cost increase to absorb. Like its parcel shipping competitors UPS and FedEx, the U.S. Postal Service is seeking to raise its rates for package delivery during the busy Q4 holiday shopping season. What does this mean for retailers' promotional plans this holiday season? Will free shipping be available on all online orders? Only if a certain order amount threshold is reached? Do retailers pass along increased shipping fees to customers? How do increased shipping costs (along with other inflationary pressures) affect product pricing? While the price hike isn't yet official, that seems to be a formality, as the agency has applied for and received similar rate increases in recent years. With that in mind, retailers would be wise to start thinking about their answers to the questions above.
