Wednesday, November 23, 2011

USPS Increases Rates for Competitive Products

Governors’ Decision No. 11-8  Page 2

I. Domestic Products

A.  Express Mail
Overall, the Express Mail price change represents a 3.3 percent increase. The existing
structure of zoned Retail, Commercial Base and Commercial Plus price categories is
maintained.  New for January 2012, we will be introducing a Flat Rate Box, priced at
$39.95 across all channels.

Retail prices will increase an average of 4.4 percent. The price for the Retail Flat Rate
Envelope and Legal Flat Rate Envelope, a significant portion of all Express Mail volume,
is increasing 3.6 percent to $18.95.  

The Commercial Base price category offers lower prices to customers who use online
and other authorized postage payment methods.  The Commercial Base prices will
decrease 5.0 percent.  

The Commercial Plus price category offers even lower prices to large-volume
customers.  Commercial Plus prices, as a whole, will receive a zero percent increase,
although some prices will increase and other prices will decrease.

B.   Priority Mail
Overall, Priority Mail prices will increase by 3.1 percent.  However, the price increase
varies by rate cell and price tier.  The existing structure of Retail, Commercial Base, and
Commercial Plus price categories is maintained.  

Retail prices will increase an average of 3.2 percent.  Flat Rate Box prices will be: Small,
$5.35; Medium, $11.35; Large, $15.45; and Large APO/FPO/DPO, $13.45.  The regular
Flat Rate Envelope will be priced at $5.15, with the Legal Size and Padded Flat Rate
Envelopes priced at $5.30 at retail.

The Commercial Base price category offers lower prices to customers using online and
other authorized postage payment methods.  The average price increase for
Commercial Base will be 3.0 percent.  A new, larger-sized Regional Rate Box price tier
will be added to the two existing sizes.  If deposited at retail, a $0.75 fee will be added.

Governors’ Decision No. 11-8  Page 3

The Commercial Plus price category offers even lower prices to large-volume
customers.  The average price increase for Commercial Plus will be 2.8 percent.  This
price category will continue to contain Critical Mail letters and flats, a half pound price,
an assortment of Flat Rate packaging, and Commercial Plus Cubic pricing.  Cubic
mailers will have a reduced threshold of 150,000 pieces per year (reduced from
250,000) to qualify.  Cubic mailers will also be able to use soft packaging.  Finally, Open
and Distribute pricing for specified trays and flat tubs will be introduced in January.

C. Parcel Select
 
On average, prices for Parcel Select, the Postal Service’s bulk ground shipping product,
will increase 8.5 percent.  For destination entered parcels, the average price increases
are 7.6 percent for parcels entered at a destination delivery unit (DDU), 7.8 percent for
parcels entered at a destination plant (DSCF) and 6.8 percent for parcels entered at a
destination Network Distribution Center (DNDC).  

For nondestination-entered parcels, the average price increases are 1.5 percent for
origin Network Distribution Center (ONDC) presort, 0.9 percent for Network Distribution
Center (NDC) presort, and 0.8 percent for nonpresort.  The three-cent barcode discount
will also be eliminated.  Prices for Lightweight Parcel Select, formerly Standard Mail
commercial parcels, will increase by 8.9 percent in order to complete its transfer to the
competitive product list.  Also, the maximum dimensions for Regional Ground will
increase to accommodate any machinable parcel within this price category.  Finally, in
January 2012, the Intelligent Mail Package Barcode (IMpb) will provide customers with
free visibility for these parcels.

D. Parcel Return Service

Parcel Return Service prices will have an overall price increase of 4.6 percent. Prices for
parcels retrieved at a return Network Distribution Center (RNDC) will have a zero
percent overall increase, and prices for parcels picked up at a return delivery unit (RDU)
will increase 8.9 percent.  Additionally, the Postal Service’s suite of returns offerings,
including PRS, Merchandise Return Service, Priority Mail, First-Class Mail, and Package
Services, will have new “Return Service” branding.

Governors’ Decision No. 11-8  Page 4

E. Commercial First-Class Package Service
Commercial First-Class Mail parcels were recently transferred to the competitive product
list, and will be renamed Commercial First-Class Package Service.  This product is
positioned as a lightweight (less than one pound) offering used by businesses for
fulfillment purposes.  Overall, Commercial First-Class Package Service prices will
increase 3.7 percent, with no structural changes.  

F. Domestic Extra Services

Premium Forwarding Service prices will increase 3.4 percent.  The weekly reshipment
fee will increase to $15.25. On average, Address Enhancement Service prices will
increase 7.3 percent.  The 49 Post Office Box locations that were added to the
competitive product list in June 2010 will be joined by 6,800 additional Post Office Box
locations in January 2012.  Additional fee ranges for these boxes in Fee Groups 2
through 7 will be added as well.  Lastly, Package Intercept service will be introduced
within the Competitive Ancillary Services product, priced at $10.95.  

II. International Products

A. Expedited Services

International expedited services include Global Express Guaranteed (GXG) and Express
Mail International (EMI).  Overall, GXG prices will rise by 6 percent, and EMI will be
subject to an overall 11.6 percent increase.  Classification changes include changes to
published discounts.  In lieu of offering an across-the-board discount for customers using
approved postage payment methods, published discounts will be expanded to include
rate cell-specific discounted schedules for both GXG and EMI.  The commercial base
discount schedules replace the current across-the-board percentage discounts for
eligible shipments using selected payment methods.  Customers tendering at least
$100,000 in revenue per year for GXG, EMI, and Priority Mail International (PMI) may
request authorization for new commercial plus discounts. We are introducing two
versions of a new Express Mail International Flat Rate Box, with a maximum weight of
20 pounds. Customers pay a flat rate of $59.95 to Canada and $74.95 for all other
countries that accept Express Mail International.  Classification changes also include

Governors’ Decision No. 11-8  Page 5

country group assignments for the country of Tonga, and changes to the dimensional
limits for EMI.    
 

B. Priority Mail International

The overall increase for Priority Mail International (PMI) will be 8.7 percent.
Classification changes include the simplification of dimensional criteria for flat rate
envelopes and boxes, changes to the dimensional limits for PMI, and the introduction of
commercial base and commercial plus discounts as described for GXG and EMI.

C. International Priority Airmail and International Surface Air Lift

Published prices International Priority Airmail (IPA) will increase by 1.0 percent, and
International Surface Air Lift (ISAL) prices will increase by 13.7 percent.  

D. Airmail M-Bags

The published prices for Airmail M-Bags will increase by 3.5 percent.  

E. International Ancillary Services and Special Services

Prices for several international ancillary services and paper money orders will be
increased.  For international ancillary services, the overall increase is 5.0 percent.
Money order prices will increase by 4.7 percent.  

ORDER

The changes in prices and classes set forth herein shall be effective at 12:01 A.M. on
January 22, 2012.  We direct the Secretary to have this decision published in the
Federal Register in accordance with 39 U.S.C. § 3632(b)(2).  We also direct
management to file with the Postal Regulatory Commission appropriate notice of these
changes.

By The Governors:
Louis J. Giuliano
Chairman

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