It seems unlikely that Amazon would pay the full published increase. The higher the parcel product growth rate, the higher the rate increase in 2019.” “Rates for the fastest growing e-commerce weight category – Parcel Select Lightweight for shipments of under 1 lb – will increase a full 12.3%, reflecting the clear advantage USPS has in the lightest weight categories. “USPS will be squeezing more margin out of this rapidly growing product that by design serves its competitors and its largest customer, Amazon. “Destination-entered Parcel Select is the product USPS’s competitors use for last-mile residential delivery at the lowest possible cost,” says Callan. ![]() Almost all Parcel Select volumes – such as parcels from Amazon – are covered by Negotiated Service Agreements (NSAs). The parcel rate increases announced are for the published rate. Can USPS match or even better UPS? The postal giant needs to continue to invest in technology to improve the customer delivery experience. UPS, for example, is pushing for better quality via its UPS Customer Select interactive delivery management tool. The USA needs higher quality competition in the last mile.” “As rates rise, customers’ expectations rise as well. “USPS has made a big push to carry more e-commerce shipments, and there’s no doubt that customers are becoming more demanding when it comes to delivery,” said Cathy Morrow Roberson, founder and lead analyst at Logistics Trends & Insights. “No other service provider can offer system-wide residential delivery at a lower cost than USPS, and yet there is room to increase prices selectively to competitive advantage,” said Callan. ![]() USPS will maximize its margin opportunity in 2019 by closing its price gap with competitors while continuing to maintain its lowest-cost provider position, according to John Callan from Ursa Major Associates. ![]() While letter price increases are based on the Consumer Price Index (CPI), parcel pricing is primarily adjusted according to market conditions.
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