January 30, 2012

USPS launches flat rate box pricing for Express Mail

Service priced at $39.95 for overnight deliveries of up to 70 pounds.

By Mark B. Solomon

The U.S. Postal Service (USPS) Friday introduced a new packaging configuration for its Express Mail overnight delivery service under which a shipper can pack up to 70 pounds of goods and ship the package anywhere in the country for $39.95.

The new product builds on the launch several years ago of so-called flat rate boxes for USPS's two- to three-day delivery service known as Priority Mail. That program, by most accounts, has been a major success. It is best known for the slogan "If it fits, it ships."

The USPS said the Express Mail product is best suited to consumers and small-sized merchants selling merchandise online. USPS already offers flat rate pricing for envelope-sized Express Mail shipments.

Consumers and businesses shipping internationally can use the boxes for merchandise weighing up to 20 pounds, USPS said. The boxes are priced at $59.95 to Canada and $74.95 to all other countries that accept Express Mail International products, USPS said.

Express Mail is delivered every day of the year and comes with a money-back guarantee.

Low-cost alternative
Parcel consultants hailed the launch. "This is a great idea," said Jerry Hempstead, head of an Orlando, Fla.-based consultancy that bears his name, in an e-mail. "It coincides nicely with the Priority Mail menu of flat rate 'If it fits, it ships' containers that USPS had already demonstrated fantastic success with."

"I like the product," said Rob Martinez, president and CEO of San Diego-based parcel consultancy Shipware LLC. Martinez said USPS piloted the product in six U.S. cities before expanding it. "Intuition tells me they would not have gone national if [the] test market(s) flopped," Martinez said in an e-mail to DC Velocity.

The product dramatically undercuts the non-discounted list pricing offered by USPS's private-sector rivals, FedEx Corp. and UPS Inc. For example, FedEx charges a list rate of $171 for a 15-pound package shipped coast to coast and delivered the next morning, according to Shipware data. That sum includes fuel surcharges but may exclude so-called accessorial charges, add-ons imposed by the carriers for special services that go beyond basic pickups and deliveries.

However, Martinez does not expect large corporate shippers to migrate to the new product. Many shippers prefer single-source pricing as well as one track-and-trace network for their parcels, Martinez said. In addition, the typical express package is lightweight—three to five pounds—and moves over relatively short distances. For many corporate shippers who already have big volume discounts, the cost differential on the average parcel is not wide enough to justify regular and heavy use of the new USPS product, Martinez said.

About the Author

Mark B. Solomon
Senior Editor
Mark Solomon has spent 25 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. Mr. Solomon graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

More articles by Mark B. Solomon

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