The US Postal Service plans to start offering pricing incentives, such as volume-related discounts, for its competitive mail products including Express Mail, Priority Mail and other shipping services as of May 12.
“Just providing service at a great price is our goal,” said Steve Kearney, VP of pricing and classification for the USPS.
Right now, customers pay the same price per piece for competitive mail products regardless of how many packages they send or their method of payment. Starting in May, however, the USPS said it will start offering commercial volume pricing, minimum volume rebates, online price breaks and other pricing incentives for its competitive mail products.
The USPS said it can now offer these types of incentives for the first time in its history as a result of the passage of the Postal Accountability and Enhancement Act in 2006. According to the USPS, the incentives will help it better compete in the competitive mail market. The new prices are available at usps.com/prices.
“The new law calls these competitive products, so that’s the goal – to make them as competitive as possible,” Kearney said. “Certainly price is one component of competitiveness. Service quality and the other features such as tracking and tracing are also very important.”
According to the USPS, Express Mail will switch to a zone-based pricing system so that those shipping items overnight to shorter distances will pay less than those shipping to destinations farther away. So closer distances, such as those within major metropolitan areas, will get price reductions in Express Mail, Kearney added.
In addition, when customers pay for Express Mail services online or through a corporate account, they will be eligible for a 3% price reduction, the USPS said. And those who meet a quarterly volume minimum could also receive up to an additional 7% price reduction.
Priority Mail customers who use electronic postage or meet other requirements could receive an average of 3.5% savings, the USPS said. And large and midsize shippers who use Parcel Select could be eligible for pricing and volume incentives.
The USPS’ Parcel Return Service will switch to a weight-based pricing system, which will result in price discounts for lighter packages. The USPS currently charges a $2.20 flat price for this service, according to Kearney. Under the new system, lower weight packages will have price reductions of as much as 20%, he said. “We really think that will create value for the shippers — especially those already using the outbound parcel select service — to also use us for the return of packages,” Kearney said.
The Postal Regulatory Commission is currently accepting comments on the USPS’ proposed competitive rates. The comment period will be for at least 15 days, according to Nanci Langley, director of the office of public affairs and government relations at the PRC.