Holiday Shipping With USPS: What to Know

By November 12, 2018 Contract Negotiation, Invoice Auditing, News

With the holidays approaching, many retailers are making plans on what items to feature during sales and how to get those products to their destination before the holidays. However, the holiday season is the busiest time of year for all carriers, including USPS.

In fact, last year the postal service shipped an estimated 850 million packages between Thanksgiving and New Year’s Day. With the popularity of online shopping growing and USPS being a cost-effective option for retailers mailing packages, the carrier is under intense pressure to get packages delivered fast and on time. Spikes in demand resulted in USPS hiring an estimated 35,000 to 40,000 additional employees to handle volume increases during the holidays. But what does this mean for retailers?

Retailers who want to deliver on their promises during the holiday season and plan to use USPS should understand shipping requirements and dates to watch, and they should track any new changes to ensure a seamless process for their customers and to secure more business in the new year.

Understanding USPS Holiday Shipping Dates

One of the most important things to know when shipping with USPS during the holiday season is cutoff dates. With these dates in hand, you can start communicating with your customers and setting expectations. For example, some retailers post clear messages on their website, such as “Get it before Christmas by ordering before XYZ date.” Not only does this message help customers understand the amount of time they have to get packages in time for the holidays, but it also creates a sense of urgency in ordering.

The 2018 USPS cutoff dates are as follows:

USPS Retail Ground: Dec. 14

First-Class Package Service® (up to 15.99 ounces): Dec 14

First-Class Mail® (including greeting cards): Dec. 20

Priority Mail®: Dec. 20

Alaska to Mainland Priority Mail® and First-Class Mail®: Dec 20

Hawaii to Mainland Priority Mail® and First-Class Mail®: Dec 20

Priority Mail Express®: Dec. 22 (Same for Hawaii and Alaska to Mainland)

Are you shipping to a different part of the world? If so, check out more information on shipping at USPS’ holiday shipping section.

Services Available During the Holidays

When using USPS during the holidays, it helps to understand what the different services are best used for and expected dates of delivery so you can select the most cost-effective one while still meeting customer expectations. Check out a few of the more popular options.

USPS Ground

USPS Ground Retail service is Primarily used when the items being sent are not allowed to fly.  Pricing is similar to Priority Mail (PM) so unless the items contain Hazardous materials, it would be better to choose the premium PM service.  There are also other ground services specifically for Media, Books, Bound Printed Matter and when sending to or from a Library. Pricing is based on the distance the parcel must travel and the weight of the parcel.

First-Class Mail

First-Class Mail is the most popular service, and it’s an inexpensive way to send items through USPS. You can send large envelopes and small packages up to 15.99 ounces using this service.  Currently First Class Package Service (FCPS) is based only upon the weight in ounces and not the distance. The USPS has proposed to change this to zoned pricing on January 27, 2019.

Priority Mail

Priority Mail is the most popular option for items weighing over a pound.   Commercial and E-Commerce shippers who purchase the postage online are eligible for discounted rates.  It is a non guaranteed service with defined delivery windows of 1, 2 or 3 days depending on origin and destination pairings.  Insurance of either $50 or $100 per flat package is included (CPP, high volume contract users get $100). Free premium packaging is available.  There are 4 ways to use PM, including Flat Rate (If it fits it ships), Regional Flat Rate and Cubic for CPP Customers.

If you wish to see how much of the country is served in 2 days from your location, check out this interactive delivery map.

Priority Mail Express (PME)

Priority Mail Express is a good option for retailers who need items to arrive fast. USPS offers overnight delivery guarantees, and the service is available 365 days a year with a money-back guarantee and delivery to most U.S. addresses, including P.O. boxes. The cost starts at $24.70 and increases based on package size and specifications. PME also offers Flat Rate Envelope options, and no longer includes a flat rate package option.

Does USPS Charge Holiday Surcharges?

Some carriers, such as UPS, charge a holiday surcharge during the busiest season of the year. This adds up to extra expenses for retailers. For example, UPS announced its plans for peak surcharges that are applicable during defined periods during the holiday season, which includes packages shipped after Nov. 19. Although these fees are small, with retailers shipping so many packages, they add up.

One benefit of shipping with USPS is they do not charge holiday surcharges. Additionally, they do not use dimensional weight pricing for packages under a cubic foot, and they don’t tack on additional charges for residential delivery, address correction or for fuel. This translates into a cost-effective shipping solution during the holiday season.

Comparing USPS with Other Carriers During the Holidays

Retailers have many options during the holidays, including FedEx, UPS, Parcel Consolidators (ie: PB Negistics and DHL E-Commerce), Regional Carriers and the USPS. Each carrier offers several different levels of service, which can make it difficult to know which option is best. When considering USPS for packages during the holidays, it helps to understand the benefits and the disadvantages.

USPS is less expensive for lightweight holiday packages. Retailers often want to know which option is cheapest – USPS, FedEx or UPS. Retailers who want a lower-cost shipping option should consider USPS, especially for smaller items going to the home.  Comparing Flat-rate shipping options, along with free packaging and no “Accessorial” charges make using the USPS easy and affordable. In 2016, USPS delivered 62% of all residential deliveries.

Reliability and Tracking greatly improved. In the past, some retailers complained about USPS’ reliability and lack of complete tracking, which is critical during the holiday season. However, Tracking is now on par with the national carriers and performance has improved.

USPS delivers to mailboxes and P.O. boxes. Another benefit of using USPS for holiday shipping is that unlike FedEx and UPS, it delivers to P.O. Boxes, US Territories and the Military . In fact, they are the only major shipping service that delivers to P.O. boxes and there is no extra charge for far away US territories like Guam and Puerto Rico.

USPS may not be the perfect solution for every situation, but it does excel at keeping costs low and delivering with reasonable reliability during the holiday season. Weighing the pros and cons can help you manage expectations during this busy time.

Understanding USPS Mailing Regulations

Every carrier has rules about what can and can’t be mailed, and USPS is no exception. For example, some types of aerosols may be restricted, in addition to other malleable gases. The USPS will not mail cigarettes or other tobacco products, some types of glues, nail polishes, perfumes containing alcohol, lithium batteries, perishable items, and many others.

Fragile items are accepted but should be packed with good cushioning and marked clearly with the word “fragile” on all sides of the box. Additionally, Registered Mail can be added to the delivery to ensure that valuable items have additional protection in case of loss or breakage. View a complete list of USPS mailing regulations here.

Tips for Using USPS with Greater Success

Preparing for peak holiday season is a large task, one that involves carefully evaluating your existing routing policies. What carrier/service should you use?  At what point is the decision made on routing: point of sale or at time of shipping? Does your existing shipping methods allow you rate shop based upon your specific carrier programs including known weight, size and destination?  If you are using a “Free” carrier provided shipping solution it may be limiting your choices.

Evaluate box sizes. Many packages are shipped during the holiday season, and preventing damage is key. However, extra packaging may cost you more in freight. The best practice is to use the smallest amount needed to protect the product.  Using boxes that are in pristine condition can also drastically reduce the risk of damage. The postal service estimates that a single crease in a box can reduce a box’s strength by as much as 70 percent.

Use flat-rate boxes to minimize shipping costs. If the product you are sending is dense and under ½ cubic foot, consider Cubic or one of the other Flat Rate PM options.

Understand USPS’ insurance guidelines. The worst-case scenario during the holiday season is a package that disappears and doesn’t arrive at its final destination. USPS includes $50 – $100 of insurance free for PM and PME, with additional insurance available at an extra fee based upon value.

Know the risk for damage. Packages that arrive damaged aren’t always considered the fault of USPS. If the postal service determines that the package wasn’t packed properly, they may deny your claim. As a result, it’s critical to fine-tune packing procedures.  As a rule of thumb, the box should be able to sustain a 4’ drop on its corner and not sustain product damage.

Moving Forward with Greater Efficiency

Online shopping hit record-breaking levels in 2017. Sales jumped to $108 billion, a sharp 14 percent spike over the previous year. Total sales from November and December were $691 billion, which is a 5.5 percent jump from the previous year. This shows that online retailers and brick-and-mortar stores are seeing gains in sales. For shippers, however, this means that more packages are on the road, and they must keep up with the demands of online shopping. The stakes for meeting expectations have never been higher for shippers and retailers alike.

USPS is usually the least cost method for shipping to residential customers, which is why they are the hands down leader here.  Delivery to every door 6 days a week. The key to optimizing your Carrier and Service mix, including the USPS, is to continually measure progress and work around any inefficiencies.

For example, innovative technology such as invoice audit software that includes detailed reporting allows you to see where you’re overspending in areas such as shipping and figure out more effective ways to maximize efficiency and save during the holiday season. Generating healthy revenue in the future starts with striking the right balance between meeting customer expectations and generating sales. Accomplish this and your retail business will continually thrive in the future.

About Shipware

Shipware delivers volume parcel and less-than-truckload shippers intelligent and innovative distribution solutions and strategies. Whether you ship with FedEx, UPS, USPS or regional carriers, our invoice audit and negotiation services are guaranteed to reduce your parcel and LTL shipping costs by 10 to 30 percent, with no disruption of current operations. Our team of experts has more than 200 years of carrier pricing experience. We have negotiated thousands of FedEx, UPS and LTL contracts – saving our clients an average of 19 percent.

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