NET MINIMUMS

Maximize Your Shipping Value With USPS

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

When is a discount not really a discount? Read the fine print.

Last week we took you behind the headlines to show you how the actual price of shipping lightweight packages with our competitors can be substantially higher than the published increases. Another factor to consider for 2009 is the impact of net minimums on your overall shipping costs if you are receiving a discount.

What is a net minimum? The net minimum charge is the lowest base price you will pay with our competitors — regardless of discount — and that’s before any add-on charges. For 2009, the net minimum is the Zone 2, 1-pound ground published price of $4.57.

Unlike our competitors, when you ship with the Postal Service, you receive the full price incentive — we have no net minimums.

How does this affect you? Here’s an example. Let’s say you have a 15 percent discount with one of our competitors and you are shipping a Zone 3, 2-pound ground package to a business. The list price is $4.94. With your 15 percent discount you might expect to pay $4.20 plus fuel. However, your real cost will be $4.57 plus fuel — and your real discount will be 7.5 percent — only half.

The larger the discount you receive, the greater the impact of net minimums on your prices for shipping lightweight packages. In fact, depending on your agreement, you may not receive any discount at all for packages weighing less than 10 pounds.

The net minimum price with our competitors continues to increase year after year. For 2009 the net minimum will go up by 37 cents— a 9 percent increase over 2008 and almost double last year’s 20-cent increase. In a future article, we’ll highlight the new price incentives that the Postal Service is offering in January. With our pricing you will receive your full savings. We have no net minimum price and we also have the best-available list prices for your packages weighing less than 1 pound.

And the net minimum price is applied by competitors before adding in additional surcharges such as residential delivery fees and fuel. Surcharges aren’t discounted, only added to the shipping cost after the net minimum is applied. In our next article we’ll tell you what you need to know about new surcharges and surcharge increases for 2009 and the potential impact on your bottom-line shipping budget.

For more information about net minimums, surcharges and comparative shipping costs, write to us at: PackageServices@usps.com.

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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