PRICED TO COMPETE

The Value Behind The Headlines

Editor’s note: Ahead of price changes for shipping services on Jan. 18, we’re providing you with product information in a series of special editions.

You’ve probably seen industry announcements of shipping price increases for January:

	FedEx	UPS	USPS
Overnight	6.9%	6.9%	5.7%
2/3 Day	6.9%	6.9%	3.9%
Ground	5.9%	5.9%	5.9%

As you can see, the commercial carriers have published identical price increases again this year. USPS publishedincreases are slightly lower — but let’s take you behind the headlines. In this series of articles, we’ll show you what you can really expect to pay if you are a small package shipper — and how much you might save by rethinking your shipping.

Commercial carrier published increases are based on a straight average across all rate cells regardless of volumes shipped. The actual increase for you if you are shipping lightweight packages is much higher. Our published increases are weight averaged by cell to reflect what shippers can actually expect to pay.

If you ship with our competitor the actual increase on your 1-5 pound packages for 2009 will be 7.9 percent for a ground shipment going to a business. This continues a trend over the past several years of hitting lightweight packages with a higher than average increase. In fact over the past five years the cost of a ground shipment with our competitors has gone up by almost 30 percent.

By comparison, over the same period, USPS has increased 1-5 pound prices by less than 23 percent. The majority of our packages are lightweight, and we work hard to keep these prices low. If you are shipping lightweight residential packages the comparison is even more compelling. We’ll be telling you more about residential shipping costs later in this series of articles.

The continued development of the global online shopping and auction industries and changes in inventory management have resulted in unprecedented growth in lightweight shipping — the same shipments that are receiving higher than average price increases by our competitors.

“USPS continues to provide the best value for your shipping dollar,” says Jim Cochrane, vice president, Ground Shipping. “We are so good at lightweight residential shipments that even our traditional competitors rely on us to deliver thousands of packages to customers daily.”

In our next series of articles we’ll show you how surcharges, net minimums, delivery area surcharges and the new extended delivery area surcharges are added to the price of shipping by competitors even after any discounted rates are applied, so you can understand what you are really paying.

For more information, go to usps.com/prices.

INFO@USPS

Your Links To Mailing Resources

U.S. Postal Service: usps.com

National PCC Network: usps.com/pcc

Rapid Information Bulletin Board System: ribbs.usps.gov

Questions? Comments? Send an e-mail to pccinsider@usps.gov

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