Calculating the Effects of the USPS 2019 Shipping Rate Changes | ShippingEasy
Calculating 2019 shipping rate changes

Calculating the Effects of the USPS 2019 Shipping Rate Changes

By Rob Zaleski, Dec 7, 2018

For some online sellers, the upcoming USPS shipping rate changes are going to have major repercussions on shipping margins. They will also have effects on how you have to package and prepare your shipments, particularly large, light items. If want a preview of what the effects of 2019 shipping rate changes could be, we’re going to dive into some examples here to help you know what to expect in the coming year.

Let’s start with USPS First Class shipping.

Effects of 2019 Shipping Rate Changes: First Class

One of the biggest announcements from the USPS is that First Class package service will go to Zone-based tiers. This means the service is no longer a single cost based on weight, no matter how far the package is going. Now, destination matters. For a full breakdown of the proposed changes, please check out our article on the First Class rate changes.

Here, let’s take a look at a possible scenario. In the table below, we’ve taken a cross-section of ten orders shipping out in a day, and the cost difference from 2018 rates to the new structure in 2019.

CarrierService TypeWeight (oz)Zone2018 Postage Cost2019 Postage CostDifference
USPSFirst Class Mail61$2.92$3.18$0.26
USPSFirst Class Mail114$3.66$3.88$0.22
USPSFirst Class Mail55$2.79$3.28$0.49
USPSFirst Class Mail68$2.92$3.63$0.71
USPSFirst Class Mail41$2.66$2.66$0.00
USPSFirst Class Mail133$4.10$4.98$0.88
USPSFirst Class Mail114$3.66$3.88$0.22
USPSFirst Class Mail55$2.79$3.28$0.49
USPSFirst Class Mail129$3.82$4.33$0.51
USPSFirst Class Mail41$2.66$2.66$0.00
Daily Total$31.98$35.76$3.78
Weekly$223.86$250.32$26.46
Monthly$959.40$1,072.80$113.40
Annually$11,672.70$13,052.40$1,379.70

As you can see, items shipping to Zone 1 (and 2) actually stay the same from 2018 to 2019. So, if you predominantly ship First Class locally, you may not see much of a change at all. The real difference comes when the Zone breakdowns happen, particularly the closer your package weight gets to 1 lb. A 6 oz. package going to Zone 8 will increase by $0.71, for example.

Extrapolating that out per week, month, and year, you can see the hit to your bottom line adds up. Shipping just 10 orders per day, the end-of-year cost increase is $1,379.70. This is something you’ll certainly need to account for.

That being said, First Class Package Service is still the most cost-effective shipping method for items under 1 lb. If you have a lot of local customers, you’ll be happy to see relatively no difference in your shipping costs.

Effects of 2019 Shipping Rate Changes: Priority Mail

This is where things will get a lot more complicated, and a place where having shipping software will assist greatly. Across all Zone, Priority Mail will incorporate Dimensional Weight, also called DIM weight, so you’ll need to perform different calculations. For a full breakdown of the changes, you can read our article here. The good news is if you ship smaller packages, heavier packages, or large heavy items, you probably don’t have too much to worry about. The difficulty comes with shipping larger, lightweight packages.

The way to calculate Dimensional Weight is to take the length, width, and height in inches of your package, and divide that by 1,728 (the number of inches in a cubic foot). If the number is larger than 1 cubic foot, then you need to use Dimensional Weight with the following equation:

(L x W x H)/166 = Dimensional Weight (Check out our DIM Weight Calculator to have this calculated for you – currently FedEx and UPS, with USPS coming soon)

The 166 divisor will be standard across USPS, UPS, and FedEx as far as we know to this point. If the Dimensional Weight is higher than the physical weight, your shipping costs are based on the new Dimensional Weight. In some cases, this can cost a good deal more than the original weight.

Example:

    16 x 12 x 10 package, weight 2 lbs., shipping to Zone 2
    Is it larger than one cubic foot: (16 x 12 x 10)/1728 = Yes (1.11 cubic feet)
    Dimensional weight: (16 x 12 x 10)/166 = 11.57 lbs. (round up to 12 lbs.)
    The 2018 Priority Mail shipping rate for a 2 lb package: $6.89
    The 2019 Priority Mail shipping rate for a 2 lb package: $7.42
    The 2019 rate with DIM Weight incorporated: $11.32

As you can see, excess package space can literally cost you nearly $5 per shipment if you’re not being smart about how you package your products. That being said, if you have large but light products that can’t be squished into a smaller than 12 x 12 x 12 box, you’ll need to expect higher shipping costs when sending products through Priority Mail.

These calculations can get a bit hairy. Shipping software can help you make sense of it all and ship using the smartest (and most cost-effective) means possible. Set up your ShippingEasy account now and get 30 days free! This way, you’ll be set up and ready to go before the 2019 USPS shipping rates change on January 27, 2019.

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Rob Zaleski

Content Marketing Manager at ShippingEasy
I'm a digital content and social media nerd with a passion for telling stories, helping connect people, and finding joy in the details.

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