How upcoming holiday shipping rate increases will affect ecommerce

By The MixDex Team Article may include affiliate links

The U.S. Postal Service, FedEx and UPS are all making some changes to rates in anticipation of the holiday shipping season.

The USPS became the latest major shipping provider to announce a temporary “surge” increase (the USPS, unlike FedEx and UPS, needs approval to increase rates).

The USPS changes take effect Oct. 3, 2021 and run through Dec. 26, 2021 and include:

  • $0.30 increase on First Class Package Service in all weights and zones
  • $0.25 increase on Priority Mail Cubic across all tiers for Zones 1-4
  • $0.75 increase on Priority Mail Cubic across all tiers for Zones 5-9
  • $0.75 increase on Priority Mail flat rate boxes and envelopes

There is also a series of changes for Priority Mail, Priority Mail Express (non-flat rate packaging) and Parcel Select Ground.

  • $0.25 increase for 1 to 10 lbs. Zones 1-4
  • $0.75 increase for 1-10 lbs. Zoons 5-9
  • $1.50 increase for 11-20 lbs., Zones 1-4
  • $3.00 increase for 11-20 lbs., Zones 5-9
  • $2.50 increase for 21-70 lbs., Zones 1-4
  • $5.00 increase for 21-70 lbs., Zones 5-9

The rate increase will affect packages shipped during these times, regardless of when the postage was purchased or printed.

There are no changes to traditional letter or postcard mailing rates and Forever Stamps will continue to work as normal on non-package mail.

The one exception is if customers use Forever Stamps on packages — in this case, they will be calculated based on their current value and not the price originally paid.

It’s worth noting that the USPS changes end Dec. 26, 2021, so many holiday returns will be processed under the lower rates, assuming no further changes are made (USPS, like other shippers, offers lower “return service” pricing, but not all merchants use it).

The increases appear to be a way to help offset rising costs across the board as well as respond to the anticipated significant spike in demand for shipping during the last few months of the year.

Shipping services are seeing overwhelming demand as a result of the coronavirus pandemic and overall general shift to ecommerce. Meanwhile, they are also facing increased labor and COVID-19 protocol costs.

Many U.S. businesses, including ecommerce, do a substantial increase in business during this time, often starting the day after Thanksgiving, also known as Black Friday, through the follow Monday, dubbed Cyber Monday.

UPS also raised its rates on select services with many of the changes affecting international shipping but also UPS Ground residential deliveries and its SurePost service. Some of these changes don’t have an expiration date, but the ground and SurePost ones have a listed expiration date of Oct. 30, 2021.

FedEx also increased international rates back in April 2021 and is planning new increases to many of its domestic services starting in October and November 2021 and continuing through January 2022 in most cases, including residential deliveries.

Meanwhile, popular postage website Pirate Ship, says it’s worked out a deal with an alternative provider to give customers lower rates starting Oct. 3, 2021, but hasn’t revealed who that provider is.

Starting Jan. 17, 2022, FedEx will add $0.60 to all residential address deliveries for its FedEx Express and Ground services (excluding the One Rate and contracted Ground Economy pricing).

It’s important that store owners take note of these increases — though they are often relatively small — and adjust shipping fees or product pricing to account for the added cost.

For ecommerce platforms that integrate dynamically, store owners likely won’t need to make any adjustments, but it’s still worth checking that your data feed will reflect the changes.

Retailers that sell recurring subscriptions or shipments may also feel a small pinch since boxes shipped during most of October, November and December will be subject to slightly higher fees and customers typically are “locked in” to predetermined rates based on when they signed up. Pricing or product cost may also need to be adjusted slightly moving forward.

The latest USPS changes follow an August 2021 rate increase on Media Mail and Signature Confirmation services.

The USPS raised the cost of general signature confirmation by $0.20 in August, but opted to leave the adult signature required service, often used by retailers shipping alcohol or other controlled products, the same.

Media mail, which is limited to printed books and magazines and electronic recordings on CD or DVD, and typically takes a bit longer for delivery, rose between 10% and 13%, depending on the weight, with the average being around 12%. In general, heavier shipments, which can be up to 70 lbs. using this service, saw proportionally higher increases.

For example, one 1 lb. media mail package rose $0.30 while the cost to ship a 70 lb. package went up $5.13.