The US Postal Service’s proposal to reorganize its Small Parcel offerings would align its products more closely with those of its competitors. However, customers are having a hard time seeing the benefits, given the price increases these products face in the exigent rate case.
The Postal Service filed a formal request with its regulator, the Postal Regulatory Commission (PRC), to transfer commercial Standard Mail Fulfillment Parcels from its market-dominant product list to its competitive product list. It is also seeking to eliminate its Not Flat-Machinable product, which is a hybrid flat-parcel product, and replace it with a new Marketing Parcels product. The USPS laid out its strategy for small parcels redesign and proposed price increases for these products in its exigent rate case, which proposes price hikes on average of more than 20% for these products.
“This is a competitive market and there are other shippers in the marketplace fulfilling this weight for packages,” said Gary Reblin, VP for shipping services. “This is a logical change and customers will no longer have to navigate two different products and rate structures for one business need.”
Organizations use the Postal Service’s Standard Parcels products and its hybrid flat-parcel product, Not Flat-Machinable (NFM), to mail items such as CDs, DVDs, checks, prescription drugs, costume jewelry and lightweight clothing. Under the USPS’ proposal, Standard Parcels would become a competitive product known as Standard Mail Fulfillment Parcels and would fall under a lightweight subcategory of Parcel Select.
Marketing Parcels would remain a market-dominant product but would replace the current Not Flat-Machinable category. Pieces up to two-inches thick could be mailed as marketing parcels and an addressing qualifier, such as “Or Current Resident,” must be included on the parcel.
However, some companies will see prices jump higher than the average increase of 23%, especially those that now mail Not Flat-Machinables. “On its face, the proposed price increase for the Standard Mail NFMs/Parcels product is not just unreasonable, it is outrageous,” the Parcel Shippers Association said in comments filed with the PRC on the exigent price increase.