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USPS Can Lower Priority Mail Rates for Businesses

August 22, 2014
WASHINGTON, DC—The Postal Regulatory Commission (PRC) has given the thumbs up to the U.S. Postal Service's (USPS) plans to lower its Priority Mail rates for business customers, irking ground shipping competitors such as FedEx and UPS, Post & Parcel reported.

While retail rates will increase, on average, 1.7 percent, Commercial Base business customers will see rates drop 0.9 percent, with Commercial Plus pricing going down 2.3 percent. Commercial shippers in some categories will see their rates plummet by as much as 57.8 percent, Post & Parcel said. The rate changes cover ground packages between six to 20 pounds sent within the continental United States.

UPS and FedEx, which have been increasing their rates and are about to roll out new dimensional pricing, expressed their concerns to the PRC. UPS pointed out that USPS was increasing its postage rates for the monopoly services by 5.9 percent via the exigent rate increase, which helped it drop rates for the competitive services.

In its comments to the PRC, FedEx stressed that the Postal Service was instituting cuts of 30 to 55 percent in the most popular weight categories for e-commerce. It added that such "dramatic" price decreases would be unheard of in the private sector, according to Post & Parcel.
 

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