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Thu Nov 10 2022 22:00:21

USPS Priority Mail Commercial Rates to Rise 3.6 Percent in 2023

By: Ina Steiner

Online sellers will pay more in January to ship packages under rates the USPS submitted to the Postal Regulatory Commission on Thursday. Sellers should also watch for changes to Non Standard Fees (up to $25!), and later in 2023, the US Postal Service will make a major change to First-Class Package Service (FCPS).

First, January 2023 rates in a nutshell: "Overall, Priority Mail service prices would increase approximately 5.5 percent, Priority Mail Express service prices would increase by 6.6 percent, and First-Class Package Service prices would increase by 7.8 percent."

However, those are Retail rates (the rate you pay at the post office). The USPS pointed out that Priority Mail Commercial rates will increase by 3.6 percent, "well below the rate of inflation," it noted. (Commercial rates are available to shippers who purchase shipping online. Note that Commercial prices will, on average, reflect a 20.1 percent discount off of Retail prices.)

We confirmed that the USPS was comparing the proposed 2023 rates to the prices that were implemented in January 2022 - and that it was not comparing them to the temporary peak rates that are currently in place (effective Oct. 2, 2022 - Jan. 22, 2023).

The new rates will take effect on January 22, 2023. The USPS previously submitted proposed "Market Dominant" rates that will take effect on the same date. (See the October 7th AuctionBytes Blog post, "USPS January Rate Hike, Part 1: First Class, Media Mail.")

In the filing with the PRC, the USPS stated: "Nonstandard Fees (NSFs) are changing for our full network products for 2023. Priority Mail will see an increase in NSFs, while ground products will see a price decrease in NSFs."

The USPS implemented NSFs in April 3, 2022 as follows:

Length greater than 22 inches: $4
Length greater than 30 inches: $15
Cube greater than 2 cubic feet: $15

In January, the fees will change as follows:

Priority Mail:
Length greater than 22 inches: $4
Length greater than 30 inches: $15
Cube greater than 2 cubic feet: $25

Parcel Select, First-Class Package Service, Retail Ground:
Length greater than 22 inches: $4
Length greater than 30 inches: $7
Cube greater than 2 cubic feet: $15

(Be sure to check which rates apply to your shipments.)

The USPS also revealed a major change coming to First-Class Package Service (FCPS): "Later in 2023, the Postal Service plans to enhance and expand the FCPS product up to seventy pounds, but for January 2023, FCPS will remain only a lightweight offering."

The USPS also pointed out there would be no price increase for Parcel Select Ground which, "coupled with our recently improved service standard to 2-5 days from 2-8 days, offers a reliable and economical option for shippers."

As we had reported in September, the USPS confirmed today: "New for 2023, the Priority Mail Regional Rate Boxes will be eliminated because of low usage and to avoid product redundancies. Also new for 2Q23, the zoned prices for the existing "Local, 1, 2" Zone will be differentiated. The Local zone will be eliminated, and separate prices will be established for Zone 1 and Zone 2."

The Postal Regulatory Commission is likely to rubber-stamp the proposed 2023 rates given they fall under the "Competitive" services category.

You can find the details on the PRC website at prc.gov/dockets/daily under Docket CP2023-42 The information won't become available on the Postal Explorer website at pe.usps.com/PriceChange/Index until November 16, 2022.