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Commercial and retail packages will be more expensive to send from October-January.
As brands and retailers get ready for the holiday season, they will once again have to factor increased costs of shipping through the US Postal Service into their plans.
The postal service announced a rate increase for commercial and retail parcels for the peak holiday season on August 9 that the agency said will help to cover extra handling costs during the busiest season for package delivery. The increases will be in effect from October 2-January 23, 2023.
“The Postal Service has some of the lowest postage rates in the industrialized world and continues to offer great values in shipping,” the USPS said, in a statement. “These temporary rates will keep USPS competitive while providing the agency with the revenue to cover extra costs in anticipation of peak-season volume.”
The temporary increase must still be approved by the Postal Regulatory Commission.
Under the plans, rates will increase from 25 cents to about $6 per package, depending on size and weight. There will be no price increase for USPS Connect Local, a recently-launched program providing next-day delivery service.
While Amazon has built a vaunted logistics network, the USPS remains a key carrier for packages throughout the country, including those being delivered to complete online orders. According to the Pitney Bowes Parcel Shipping Index, USPS continued to have the highest market share by parcel volume of any US carrier in 2021. The Postal Service is also in the midst of implementing a 10-year plan to improve service and financial sustainability, called Delivering for America. The agency indicated that rate increases are in line with this plan, noting that it calls for "appropriate pricing initiatives."
In its earnings report for the quarter that ended July 1, USPS said shipping and packaging volume was down 5%, or 92 million pieces. However, the agency said it believes a shift toward ecommerce in the pandemic has permanently altered sending habits, but is still seeing a dip in ecommerce activity amid a return to more in-person activities and spending on services.
“We believe consumer behavior has evolved during the pandemic, and our Shipping and Packages volume is not expected to return to pre-pandemic levels, as the nation has increasingly relied on the safety and convenience or e-commerce,” said USPS. “However, the surge in e-commerce has continued to abate as the economy recovers. Furthermore, competition in the overall market has increased as certain major customers have returned to delivering their volume from our network and aggressively pricing their products and services to fill their networks and grow package density.”
An outline of key changes to holiday season pricing follows:
LadderUp is aiming for 50% LGBTQ+ and BIPOC participation. Shopify will provide access to its platform.
LadderUp will include an 8-week ecommerce course. (Courtesy photo)
Shipt is launching a new accelerator program designed to provide ecommerce tools for local retailers.Called LadderUp, the program is centered on equity. Target-owned delivery owned Shipt said conversations with business owners have revealed that local entrepreneurs face “gaps” in technology, but they also want to participate in ecommerce platforms. The COVID-19 pandemic was especially difficult for Black business owners, who saw earnings drop between 11-28% in 2019-2020, as compared to the earnings decrease of 5-17% for the rest of the population.
With the new program, the company’s goal is to reach at least 50% LGBTQ+ and BIPOC participation in the program.
Shipt is aiming to serve businesses in Atlanta, Birmingham, Alabama, Detroit, Houston and Washington, D.C.
Target categories include: grocery/beverage, health, beauty, and floral/gifts retailers.
“Working with small businesses to build up their capabilities is a key part of our commitment to help create healthier, more resilient and equitable communities,” said CEO Kamau Witherspoon. “We recognize the unique role that we can play in both combating hunger in under-resourced communities and boosting small, local retailers that are so vital to communities across our country.”
Education: Business owners who are selected will receive an 8-week course with industry leaders that covers business-building topics including finances, efficiency, marketing, ecommerce 101, the basics of using Shipt, and legal knowledge.
Funding: Upon completion, retailers will provide $5,000 for businesses to invest in ecommerce.
Shopify access: Shopify, which is partnering with Shipt, is also providing to its access for a limited amount of time to help business owners build an online storefront and manage inventory. The program will also provide technical assistance.
Applications are open Feb. 6- March 6.