3 Tips to Minimize USPS Holiday Season Surcharges in 2021

Last Sunday, the US Postal Service temporarily adjusted prices for many popular mail services to account for the extra costs of handling mail and parcels during the busy holiday season.

As many smaller sellers solely rely on USPS to ship orders from their online stores, eBay or Etsy shops, or other marketplaces, these new temporary fees represent a big increase for many as they affect many popular Postal Service levels.

The peak season surcharges will stay in effect until December 26, 2021.

According to the Postal Service, these additional fees are needed to offset extra costs of managing high parcel volumes during the holiday season and to be consistent with other carriers such as UPS and FedEx that also use peak season surcharges.

The temporary price increases affect sellers the most are from this group of mail products that often the Postal Service considers are competitive products to UPS and FedEx:

• $0.75 increase for Priority Mail and Priority Mail Express Flat Rate Boxes and Envelopes.
• $0.25 increase for Zones 1-4, 0-10 lbs.
• $0.75 increase for Zones 5-9, 0-10 lbs.
• $1.50 increase for Zones 1-4, 11-20 lbs.
• $3.00 increase for Zones 5-9, 11-20lbs.
• $2.50 increase for Zones 1-4, 21-70 lbs.
• $5.00 increase for Zones 5-9, 21-70 lbs.

However, for many small online sellers, these surcharges are a significant cut into their profits, especially if they have to offer flat rate or free shipping to be competitive with other online retailers and sellers.

Is there anything an online merchant or seller can do to avoid or reduce the impact of the USPS peak season surcharge? There is no one simple answer as it will depend on the volume, size, and weight of packages sent.

Here are three suggestions for sellers to reduce the impact of the extra fees USPS charges for many shipments until December 26.

Packaging

10 Lbs. Cliff and Dimensional Weight

This seems like an obvious one that many sellers don’t take into consideration. Look at the size and weight of your boxes, especially if they are around the 10 lbs. area because that is where the fees really jump.

Reducing weight may not be easy unless using less packing material can make a difference without increasing the risk of breaking the product. But the size of the box may make a significant difference if dimensional weight starts to play a role.

Dimensional weight applies to boxes that are larger than 1 cubic foot (1,728 cubic inches), which translates to about 10.4 lbs, rated as 11 lbs.

When shipping larger but lightweight items, double-check the dimensional size of the box by calculating its dimensional weight using this formula: L x W x H/166.

If it’s feasible and safe to make the box smaller to get under the 1 cubic foot (1,728 cubic inches) threshold and the product is less than 10 lbs, cutting down on the box size will not only reduce base postage but also the peak season surcharge.

USPS Flat Rate Regional Boxes

If you use USPS Flat Rate boxes, do you know about USPS Flat Rate Regional Boxes? Most US Postal Service retail locations do not have these boxes available in the lobby, but they are available for free from the USPS Postal Store.

The dimensions of Flat Rate Regional Boxes are different from the standard USPS Flat Rate boxes, but shipping costs on regional boxes can be a nice saving.

One slight drawback is that USPS Click-N-Ship does not support this service and you will need to check if the marketplace or shipping platform you use supports USPS Regional Boxes.

Downsize to USPS Retail Ground and First Class Package Service

USPS has also temporarily raised the base prices for both of these services as well (30 cents), but depending on the distance, size, and weight of an item, using either service could save shippers money.

However, considering the speed disadvantage over USPS Priority Mail, sending parcels with either service during the holiday season may not meet customer expectations.

Also, First Class Package Service is limited to 13oz, which only makes it feasible for the lightest of non-breakable items. And then there is that matter of USPS has now slowed down First Class Mail on many shipments, just adding to potential customer service problems.

Sendle

Sendle is relatively new to the United States as the Australian company entered the US in 2019 and the company announced in August it would not add peak season surcharges in 2021.

One of the big advantages for online sellers is that Sendle relies on the US Postal Service to transport most of its packages. This means for sellers that use USPS to ship orders, the fulfillment process basically stays the same, except that shippers use another platform to process shipments.

On the West Coast, Sendle also added new services by using regional carrier GLS, giving shippers more options to send their packages.

How can Sendle be competitive if it relies on USPS?

Sendle offers a Flat Rate shipping program without having to use USPS Priority Mail Flat Rate boxes and shippers just have to make sure the boxes they use fall into the max weight and size.

• Micro (<0.5 lb)
• Mini (<1 lb)
• Small (<5 lbs and <172 in³)
• Medium (<10 lbs and <518 in³)
• Large (<20 lbs and <864 in³)

Unlike the previously mentioned USPS dimensional weight calculations, Sendle simplifies box measurements by multiplying only the three sides (L x W x H = in³) without having to divide by another number.

Three of the five parcel sizes have this max number (in³). The other two are not capped except those boxes cannot exceed a combined length and circumference of 108″ and sides cannot exceed 47″ which is highly unlikely with under 1 lbs packages.

Sendle can offer this simpler pricing structure leveraging high volume USPS shipping rates and averaging them into pre-set package sizes. There are sweet spots in this kind of pricing scheme that can be a good deal for shippers, but there can also be some situations where shippers could be better served using USPS rates.

For price conscious shippers, it’s best to compare shipping rates for a while to find the best pricing option for commonly used packages.

Sendle does not charge a monthly fee to use their service, there are no minimum shipment requirements, and shippers can save even more money by becoming volume shippers. These are all a big plus.

Also, higher volume shippers gain access to more delivery services, enabling faster delivery in some areas and Sendle has an Instant Shipping Calculator to check pricing, no need to even create an account to compare Sendle’s pricing to your existing solution.

On another positive side, Sendle integrates with five popular marketplaces and online commerce platforms, eBay, Etsy, Shopify, Squarespace, and WooCommerce. Amazon is coming soon.

The biggest limitation with Sendle is the maximum box size of 864 in³. By comparison, that is about equal to a USPS Priority Mail Flat Rate Box (Large) which comes in at 882 in³.

Again, to avoid confusion with this comparison, shippers DO NOT use USPS Priority Mail Flat Rate boxes with Sendle, they use their own boxes. But we wanted to give a size comparison so that sellers can understand that Sendle’s maximum box size is a bit limited right now.

Also, unlike USPS Priority Mail Flat Rate boxes, which have much higher weight limits, Sendle has a maximum weight per parcel size and the service cannot handle shipments over 20 lbs. Sendle does not offer pricing plans for shipments that fall outside of the current five sizes.

The company’s service area includes street addresses, PO Boxes, domestic military bases, in the contiguous United States, Hawaii, Alaska, Puerto Rico, and the Virgin Islands.

Sendle does not offer any international shipping services, which also includes shipments to overseas military or diplomatic addresses (APO, FPO, and DPO) and all not-before-mentioned US Territories that require customs declarations.

Even with these limitations, the fact USPS has instituted peak season surcharges and Sendle is forgoing them should make the service worth a look. No monthly fee and integrations into popular online commerce platforms make Sendle a viable alternative, even if only used for occasional shipments.

UPS on Popular Shipping Platforms

UPS, really? That might have been your first reaction to this headline. Most smaller shippers do not have the volume to get commercial discounts directly from UPS and rates the carrier charges online are usually not competitive when compared to USPS.

But UPS has been working with shipping platforms to enable them to offer highly discounted rates, including international rates.

Why highlight UPS over Fedex?

Unlike FedEx, it appears UPS has struck a deal with many popular shipping platforms not to pass on most holiday season surcharges this year. This makes the discounted UPS pricing more attractive to shippers depending on the weight, size, and destination of a shipment.

And after last year’s debacle with USPS shipping, UPS is a more reliable carrier with better tracking than the US Postal Service.

Many sellers may not have been aware that these platforms offer discounted shipping on carriers like UPS and assumed they would have to negotiate rates with the carrier and pay for weekly pickup. That process is much friendlier today even for lower volume shippers when they sign up with one of the shipping platforms.

Also, UPS (and FedEx too) have expanded drop-off points with more company-branded locations including small and major neighborhood retailers as well as expanding on-demand pickups.

But there is a monthly fee!

Yes, most online shipping platforms charge a monthly fee to access their services. This fee is often tied to shipping volume, the number of users, and other factors. However, there are also benefits that can easily offset this fee.

For example, if you ship a lot of insured packages, shipping platforms typically offer discounted insurance that can be half price over carrier insurance. Just a few insured packages could offset the fee alone.

Also, many shipping platforms offer USPS Cubic Mail pricing to their users that is typically only available to shippers that mail 50,000 packages per year. Cubic Priority Mail pricing has a size and weight maximum (20 lbs and no more than .5 cubic foot) but that option too can help offset the monthly fee.

And a final big benefit is that all major shipping platforms integrate with most major online commerce platforms such as eBay, Etsy, Amazon, Shopify, BigCommerce, WooCommerce, etc. enabling shippers to be more productive with one shipping workflow which compares all active shipping services for the best price.

The benefits shipping platforms offer for a monthly fee may be enough that even shippers with just a few shipments per week can find enough savings and productivity gains to make the fee worthwhile.

Here is a list of popular shipping platforms to consider if you want to try this route. Many offer a free trial:

• Endicia*
• Pitney Bowes
• Pirate Ship
• ShippingEasy*
• Shippo
• ShipRush
• ShipStation*
• ShipWorks*
• Stamps.com*

One final note on UPS, eBay announced that it also is not adding most UPS surcharges this year while it will pass on USPS and FedEx peak season surcharges.

This could be a good way for eBay sellers to compare prices between the two carriers even with eBay shipping prices usually being slightly higher than those offered by many shipping platforms.

Conclusion

Holiday peak season surcharges are here to stay and will likely continue in the future, even with UPS scaling back a bit on them this year when using shipping platforms.

Online marketplaces and commerce platforms may offer integrating shipping solutions with discounts, but they may not be the best discounts available or offer a wide variety of shipping partners. Even among the shipping platforms there are big differences in the shipping solutions and services they offer.

Regardless of if you have been selling online for 20 years or just started this year, it’s not too late to review your shipping workflow and choice of carriers even as the holiday selling season has started for many sellers.

This is especially true for sellers and merchants whose business has changed over the years and who may ship a greater variety of box sizes now or who have expanded internationally. You may not realize how much your business may have changed and how other shipping solutions may offer better services or pricing.

While this information focused on domestic shipping and how to save on the USPS peak season surcharge, most shipping platforms also offer additional services for international shipments, bulky shipments, or have incorporated workflows to deal with newly enacted customs and VAT regulations.

It’s never too later to review your options.

* Disclosure: Stamps.com and affiliated brands (all marked with ‘*’) is a direct advertiser on eSeller365. The inclusion in this post is informational and not part of an advertising agreement.

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