Despite falling gas prices, the cost of shipping has shot up in recent weeks.
In late December and early January, UPS and FedEx hiked their prices by nearly 5 percent. This week the U.S. Postal Service followed suit, raising the cost of shipping packages by an average of nearly 10 percent.
BY THE NUMBERS
The U.S. Postal Service has increased rates for shipping packages. (First-class stamps remain at 49 cents.)
• Priority Mail increases from $5.69 to $6.45
• A First-Class Package weighing 1 pound or less increases from $2.29 to $2.60
• Retail Ground for a package weighing 1 pound or less increases from $5.08 to $6.75 and from $6.17 to $7.84, depending on how far it’s being shipped.
Although the changes affect all consumers, businesses that rely on shipping, such as Johnny’s Selected Seeds in Winslow, are likely to feel the pinch the most.
David Mehlhorn, a vice president of sales at the seed company, said catalogs were sent out in the late fall with shipping prices – based on the dollar amount of the order – already set. Now that orders are flowing in, Mehlhorn said, the company will stick with the shipping prices it has already established.
“We recognize that this is going to happen,” he said of the increases. “You have to eat it and look for other efficiencies.”
Mehlhorn said Johnny’s will make sure that orders are going out in appropriate-sized boxes, which is especially important when items are shipped via UPS or FedEx, which have new weight-plus-size charges.
And Mehlhorn said the seed company will probably have to raise shipping rates when its next catalog goes out late this year.
But “there’s not a lot of appetite for higher shipping (prices) among consumers,” he said, especially when so many online retailers offer free shipping, particularly during the holiday season. Johnny’s only offers free shipping on orders of more than $200, he said.
Edie Johnston, CEO of Dresden-based Maine Medicinals, said her business also will have to absorb the cost of higher shipping, at least for a time. She plans to reconsider her company’s flat $5 shipping charge for her nutritional supplements.
Currently, customers can choose to have their purchases shipped by the Postal Service or FedEx, Johnston said, and most opt for the Postal Service. That means the large postal increase implemented Sunday will have an immediate impact.
“This is going to affect the bottom line,” Johnston said.
The company’s shipping fee only covers about 80 percent of shipping costs, she said, so officials will discuss the rate increases at their next quarterly meeting.
“That will be on our agenda,” she said. “That’s quite a substantial increase.”
The Postal Service noted that it hadn’t increased many of its rates for three years, and that the cost of a first-class mail stamp – 49 cents – will remain unchanged.
In announcing the increases, the USPS also changed the names and some of the specifics of its parcel services, so it can be difficult to compare the new prices with the old. In general, however, increases ranged from 3.1 percent to 21.6 percent. The price hikes in some of its most popular services included Priority Mail, up 9.8 percent, First Class Package Service, up 12.8 percent, and USPS Retail Ground, up 10 percent.
The Postal Service also increased its rent for postal boxes by 3.5 percent for six months.
Steve Doherty, a spokesman for the USPS in the Northeast, said he couldn’t provide regional or state numbers, but nationwide parcel and package volumes were 4.5 billion last year, up nearly 50 percent since 2009.
In a filing seeking approval for the increase from the Postal Regulatory Commission, the Postal Service had said it needs additional money for infrastructure and to support its “ability to provide prompt, reliable and efficient universal service to the American public.”
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