US Postal Service Files Notice for Postage Rate Increases – August 2021


The Postal Regulatory Commission (PRC) is requesting price changes to take effect August 29, 2021. The percent increase is quite substantial — so you should budget accordingly. As fulfillment experts, we suggest you complete any promotional campaigns you can do prior to the rate increase, whether it’s direct mail or packages. It would certainly save your business money going into the fall advertising season.

Why are postage rate increases happening now?

The USPS is implementing a 10 year plan called Delivery for America to achieve financial sustainability and service excellence. The Postal Accountability and Enhancement Act (PAEA) of 2006 capped price increases for mailing services at the Consumer Price Index. In November 2020, the existing rate-setting system was deemed inadequate by the postal rate commission. The new ruling provides the USPS more rate authority when establishing prices for mailing services, providing the ability to adjust prices based on declining mail volumes and growing logistics costs. With full implementation, the Postal Service’s 10-year plan is designed to reverse a projected $160 billion in operating losses over the next 10 years.

In 2020, The Postal Service delivered approximately 129.2 billion pieces of mail and packages to customers located in every state and territory, county, city, town, and rural area in the nation.

The proposed mailing services price changes include:

Mailing Services Price Changes
Product Current Proposed
Stamps $0.55 $0.58
Flats Single Piece $1.00 $1.16
Package Services Price Changes
Product Current Proposed
Media Mail $3.71 $4.11
BPM Parcels and Flats $0.96 $1.03

Trust Fulco Fulfillment for all of your shipping and postage questions

Fulco Fulfillment advises clients on the most efficient ways to minimize shipping costs through smart packaging and streamlined order fulfillment operations. We know that shipping is one of the biggest costs in your budget, so we work closely with you to determine the most cost-effective shipping methods and rates. We are here to help you alleviate the impacts of the impending rate increases from the USPS as best as possible. Call us at 973-361-1700 or fill out or contact form — we’d love to answer your fulfillment questions.


Are USPS Postage Rates Going Up in 2020?


The United States Postal Service announced its proposed new price changes to take effect Jan. 26, 2020. While the price of a first-class stamp isn’t changing, the prices of flat-rate Priority Mail packages are going up across the board. The proposed prices, approved by the governors of the Postal Service, would raise the following rates 1.9%:

  • Overall 1st Class Postage
  • USPS Marketing Mail
  • Periodicals

The price of a First-Class Mail Forever stamp will not be increasing, it will remain at 55 cents. The single-piece letter additional ounce price would remain at 15 cents. Also unchanged would be the prices of postcard stamps at 35 cents and 1-ounce flats at $1.

Overall, Priority Mail and Priority Mail Express will increase 4.1% and 3.5% respectively, but those increases vary by Retail/Commercial, zone and weight.

This rate change for shipping products is timed similar to UPS® and FedEx®, who historically adjust prices each January. On January 6, 2020, FedEx raised prices an average of 4.9%.

The Postal Service, unlike some other shippers, does not add surcharges for fuel, residential delivery, or regular Saturday or holiday season delivery.

The proposed Mailing Services price changes include:

Mailing Services Price Changes

Product Current Proposed
Letters (1 oz.) 55 cents 55 cents
Letters additional ounces 15 cents 15 cents
Letters (metered 1 oz.) 50 cents 50 cents
Flats (1 oz.) $1 $1
Outbound International Letters (1 oz.) $1.15 $1.20
Domestic Postcards 35 cents 35 cents

Domestic Priority Mail Flat Rate Retail Price Changes

Product Current Proposed
Small Flat-Rate Box $7.90 $8.30
Medium Flat-Rate Box $14.35 $15.05
Large Flat-Rate Box $19.95 $21.10
APO/FPO Large Flat-Rate Box $18.45 $19.60
Regular Flat-Rate Envelope $7.35 $7.75
Legal Flat-Rate Envelope $7.65 $8.05
Padded Flat-Rate Envelope $8 $8.40

The PRC will review the prices before they are scheduled to take effect Jan. 26, 2020. The complete Postal Service price filings with prices for all products can be found on the PRC site under the Daily Listings section at prc.gov/dockets/daily. For the Mailing Services filing see Docket No. R2020-1. For the Shipping Services filing see Docket No. CP2020-5. The price change tables are also available on the Postal Service’s Postal Explorer website pe.usps.com/PriceChange/Index

Trust Fulco Fulfillment for all of your shipping and postage questions

Fulco Fulfillment advises clients on the most efficient ways to minimize shipping costs through smart packaging and streamlined order fulfillment operations. Call us at 973-361-1700, we’d love to answer your fulfillment questions.


What is Dimensional Weight Pricing (DIM)?


In simple terms, DIM weight pricing is a way of calculating the fee associated with shipping a parcel based on that parcel’s size. The purpose of dimensional weight pricing is to take into account the cubic volume of the package in relation to the parcel’s actual weight. Businesses freight charges are no longer just calculated by how much their packages weigh, the new algorithm also calculates freight charges by how much space the package takes up on the truck or plane.

Carrier space is prime real estate and is priced as such.

With online shopping growing by leaps and bounds each year, carriers put tremendous value on the amount of space available in a truck, trailer or delivery van. Carriers want to discourage shippers from sending out oversized containers that are mainly packing materials, so shippers need to begin packing their products more efficiently so carriers are able to load more packages into the available space on each vehicle of transport. Packages that fail to meet these guidelines will cost more to ship.

DIM pricing, how is it calculated?

Dimensional weight pricing is calculated by dividing the volume of your package by the DIM factor, which is a mathematical constant that is considered as the base weight of one cubic foot of space and is correlated with a specific number given by each carrier.

THE DIMENSION WEIGHT CALCULATION = (Length x Height x Width)/DIM Factor

Using this calculation, freight carriers like FedEx, USPS or UPS calculate shipping charges based on whichever of the following numbers is greater: 1) the actual weight of the package or 2) its calculated dimensional weight. Whichever number is higher becomes your billable weight.

For example, if you are shipping a plush toy such as a stuffed teddy bear in a 12”x12”x12” box, the actual weight of the stuffed teddy bear, box and filler might add up to a total weight of 5 pounds. However, when you multiply the package dimensions and divide by the UPS or FedEx DIM factor of 166, the package’s dimensional weight comes out to 10 pounds which, because it’s the higher number, is how you’ll be billed.

Actual Weight = 5 pounds < 10 pounds DIM Weight

Check your carriers’ DIM factors, or call Fulco Fulfillment.

The current DIM divisor of DHL is 139, while UPS and FedEx are both 166. For international shipping, the DIM factor of both UPS and FedEx is 139. So imagine you were shipping that same plush teddy bear overseas using UPS or FedEx. Your DIM factor would be lower but your billable weight would be higher.

Actual Weight = 5 pounds < 12 pounds DIM weight

Essentially, the higher the DIM factor, the lower the dimensional weight and vice versa.

How Fulco Fulfillment Inc. can help you beat DIM pricing.

At Fulco Fulfillment Inc. we always believe there is a better way. We have over 35 years of experience helping our fulfillment customers save money on their shipping and freight costs. When it comes to DIM pricing, the results are no different: We will save you money. Here’s how:

  • Right-sized packaging to reduce DIM weight charges: Wasted space is wasted money. We pack as tightly as possible without allowing empty space that can drive up DIM weight charges. We use packing material that protects but won’t expand or leave a bulge, which if improperly calculated will increase your carrier costs. Our goal is to make sure the dimensional weight is less than the actual weight of the package.
  • Cut down on shipping high-volume, low-weight goods: This kind of packaging can take a real bite out of your margins, because the dimensional weights of high-volume, low-weight goods are much more than their actual weights. Fulco Fulfillment Inc. can suggest your best options to circumvent DIM pricing.
  • Pass the cost on to your customers: You never want to increase costs for your customers, but sometimes it’s the only way that makes sense for your business. A clear explanation of the DIM pricing mechanism to your customers can help alleviate any hard feelings. Most customers who are loyal to your products will not fuss over a small increase in shipping costs.

DIM weight pricing expertise and all of your fulfillment and distribution needs under one roof.

To stay competitive in your industry you need to watch every dollar and how it’s spent. When it comes to saving money in carrier costs, Fulco Fulfillment Inc. can help you weigh the opportunities and drive lower costs because every aspect of your fulfillment and distribution can be handled from under one roof.

To learn more give us a call at 973-361-1700 or use the contact form here and we’ll be in touch.