The United States Postal Service has released its proposed changes to shipping rates for 2020, to take effect on January 26, 2020. FedEx has released their changes to an extent (other details, like changes to FedEx One Rate, still to come). If you’re completely unfamiliar with what is changing, you can see our breakdowns of the 2020 shipping rates for USPS here and FedEx here.
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In this article, we’re going to focus mainly on the USPS changes since those are the only ones fully released. They are subject to change if the Postal Regulatory Commission decides to make changes, but that doesn’t seem very likely. We’ll dive into the 2020 shipping rates for some of the most popular USPS services and show what exactly the increases will look like to your bottom line.
2020 Priority Mail shipping rates
We’ll start with what is probably the most popular and most used shipping service USPS offers. Priority Mail offers many features, including various flat rate options. The standard Priority Mail shipping cost is calculated by weight and destination, called Zone.
Priority Mail shipping rates are increasing by an average of 3.0 percent, a much lower increase than the 2019 rate increase of 6.2 percent. While that’s good news, e-commerce merchants will still feel the increase a bit.
Let’s take a look at the difference you’d experience shipping a 4-pound package.
|2019 Commercial Rates||2020 Commercial Rates||Price |
|Zones 1 & 2||$7.71||$7.94||$0.23|
If you ship 500 packages per month, that’s a minimum difference of $115 per month, cutting into your annual revenue by at least $1,380. A way to mitigate some of this effect is to consider Priority Mail Flat Rate and Regional Rate whenever possible.
In the same example, let’s say you’re sending a 4-pound package to Zone 5.
- Priority Mail: $10.33 once the 2020 shipping rates go into effect
- Regional Rate Box A: $8.92
That would be a substantial saving over the current 2019 price of $10.03, let alone the increased 2020 rate. Since it’s still Priority Mail, you’re not losing any of the benefits and you can order the boxes free from USPS to be delivered to your home or office! Check out the Regional Rate Box A and Box B 2020 shipping rates below.
|USPS Regional Rate |
|Zones 1 & 2||$7.65||$7.68||$0.03|
|USPS Regional Rate |
|Zones 1 & 2||$8.05||$8.07||$0.02|
Something else you could try is splitting orders into smaller packages and shipping them via First Class Package Service. It won’t always apply but is certainly worth looking into.
First Class Package Service
Last year’s changes caught merchants by surprise, as this service used to be based solely on the weight and didn’t change based on destination. It was easy to use and very cost-effective. Then the USPS changed the structure to take Zones into account like Priority Mail and the average rate increase hit double digits for First Class Package Service. In 2020, there aren’t any major structural changes but those rates are still increasing.
Unfortunately, there isn’t really a much more cost-effective way to ship items that weigh less than a pound. FCPS is still the best way to ship these lightweight packages, so merchants are just going to have to deal with the 2020 shipping rates as best they can.
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Let’s look at the increases in the 2020 shipping rates for a 5 oz package.
|First Class |
|2019 Shipping Costs||2020 Shipping Costs||Price Increase|
|Zones 1 & 2||$3.18||$3.21||$0.03|
Sure, it’s just a few cents but that all adds up. Many sellers who use FCPS are operating on some thin margins when it comes to shipping, so those few cents can still be problematic.
What this means is that merchants who want to offer free shipping will either need to find ways to cut costs elsewhere, or possibly bake the shipping costs into their product pricing. It’s not ideal, but being upfront with your customers could possibly help soften the blow. When customers have an affinity for your brand, particularly the human element of it, they may be more understanding.
Multicarrier Approach Is the Way to Go
While First Class Package Service is tough to beat with other carriers, there could be instances where FedEx or UPS may come in at a better cost than a Priority Mail package, depending on weight and destination. This can be particularly true if you have negotiated rates. It’s always worth comparing across carriers.
This can be a pain, however, if you are left having to hop from browser tab to browser tab every time you want to ship a package. That’s why a platform like ShippingEasy makes your life so much, well, easier! Compare rates across carriers in a single screen, set up automation to choose the most cost-effective shipping method so you don’t even have to think about it, and get the best available rates.
We’re here to help you take on the 2020 shipping rates with ease. Our award-winning Customer Support team can help answer questions and make sure you’re shipping in the smartest way possible. Try our platform free for 30 days to see how much easier shipping can be!
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