Amazon, Ecommerce Hit Hard By USPS 2019 Rate Hikes

The PRC’s approval of USPS shipping rate hikes in January spells trouble for e-commerce companies and major mailers, as double-digit hikes mean package shippers will be paying a lot more after January 27, 2019.

For Amazon alone, it has been estimated the hit on the company’s online retail operating revenue will be 5%.

One question: what will UPS and FedEx do with their last mile products given that prices jump up to 30%. These products utilize the USPS for the last mile of delivery. Announcements on price adjustments for UPS SurePost and FedEx Smart are expected soon.

Ecommerce shippers real pain comes with Priority Mail changes with the ending of Commercial Plus Pricing. Now shippers must pay Commercial Base Pricing, which will mean double-digit rate hikes across the board.

“This is a major increase, no way to sugarcoat it,” writes Gordon Glazer of Shipware. “Shippers will be well advised to analyze their shipping distribution profile to gauge how these changes will impact your costs.”

Glazer recommends re-examining logistics with an eye on minimizing increases.

“It will be a good time to look for savings by examining routing logic, review carrier contracts and network with industry peers,” he writes … (click to read more)

Related:

President Trump Warns Amazon: USPS Could Raise Rates