How the 2023 USPS Shipping Rates Will Affect Your E-commerce Business

With the start of 2023, online merchants everywhere are trying to prepare their businesses for whatever challenges they may face this year. While many aspects of business are hard to predict, one aspect that has been confirmed is the 2023 USPS shipping rates.

This year’s USPS rate changes were approved by the PRC at the end of last month but will take effect later this month. E-commerce business owners can circle January 22, 2023, as the day these new rates will take effect.

As you may expect, rates will be higher on average across the board. There will also be a few structural changes that will affect your USPS shipping costs. The reason for this can be pointed to the need for the Postal Service to keep up with the rise in inflation and their commitment to stay in line with their 10-year plan to reverse a projected $160B in operating losses.

But, what you can also expect going into next year is Shippo’s commitment to providing the best possible USPS shipping rates to our merchants. Below, we’ll review the rate changes for some of the most popular shipping services the USPS offers.

Keep in mind these changes will reflect the Commercial Price Plus (CPP) rates that Shippo users pay. CPP rates are lower than retail rates. And as part of Shippo’s latest agreement with the USPS, Shippo users can also find even lower rates for certain shipments being delivered via USPS Priority Mail®!

Table of Contents

1. 2023 Rate Changes For USPS Priority Mail (Weight-Based)
2. Rate Adjustments For USPS Priority Mail Express 2023 (Weight-Based)
3. 2023 USPS Priority Mail Flat Rate Price Changes
4. 2023 USPS First-Class Package Service Rate Changes
5. USPS Parcel Select Ground Rate Changes
   
6. 2023 USPS Priority Mail International Rate Adjustments
7. Notable Structural Changes For USPS Rates
8. New Label Delivery Service To Be Introduced
9. How Shipping With USPS Can Benefit Your Business
10. Best Way To Get Cheaper USPS Rates in 2023
    

2023 Rate Changes For USPS Priority Mail (Weight-Based)

USPS Priority Mail is one of the staple services USPS offers to shippers and will see a slight increase in price in 2023. For Shippo users, Priority Mail prices will go up by 3.6% on average. Despite the average increase, these prices will be 20.1% less than retail rates on average.

To highlight an example of that, check out these USPS shipping rates for retail below:

And now compare that to USPS Commercial Rates for the same packages:

Just comparing these weights alone, you can see savings of up to $8.20 when shipping a five-pound package to Zone 9 with Shippo.

In addition to Commercial Rates being lower that Retail rates, USPS allows Shippo to offer an additional discount for Priority Mail in specific weight & zone combinations, Cubic pricing and most Flat Rate products (available at your local Post Office or at usps.com). You could potentially save over 30% off retail rates!

However, you’ll want to make sure you take extra time to measure your Priority Mail packages. Nonstandard fees, which involve exceeding the size limit set for these parcels, will be increased while these fees for other USPS services will decrease.

Priority Mail Boxes can measure up to 108 inches in combined length and girth.

Rate Adjustments For USPS Priority Mail Express 2023 (Weight-Based)

Priority Mail Express (PME) is a widely popular option for e-commerce merchants looking to offer faster shipping to their customers. PME can often deliver packages in as little as one to two business days. Since this is a bit faster service, it will see a higher percent change.

Priority Mail Express shipments through Shippo will see an increase of 6% on average. At the same time, PME rates will also reflect a 12.5% discount off retail rates on average. Some of the biggest discount percentages can be seen below.

These savings can add up if you commonly use PME as your main shipping service. Luckily, you can keep track of your shipping costs through our new and improved Shipping Analytics tool within Shippo.

2023 USPS Priority Mail Flat Rate Price Changes

USPS Priority Mail Flat Rate can be a great option for merchants who don’t mind using USPS-branded boxes and have items that will fit comfortably in those boxes. As the famous tagline suggests, “if it fits, it ships for a low flat rate”. These shipments don’t account for weight, so this service could save you a lot of money if you have smaller but heavier items.

For this service, you’ll actually see discounts as high as 16.58% when you compare commercial rates to retail rates. For Shippo users, these discounts can be as high as 21% for certain service levels.

2023 USPS First-Class Package Service Rate Changes

For smaller items, specifically those that weigh less than a pound, USPS First-Class Package Service will often provide the cheapest USPS shipping rates. While these rates will continue to be a low-cost option for items that fit these criteria, there will be a slight increase in price across the board.

Shippo users can expect an average increase of 8% in price. However, the discounts can be substantial compared to retail, including up to 26% off of retail rates. Check out the table below for a deeper dive into how the discounts for each type of FCPS package will look.

Unlike, Priority Mail shipments, the Nonstandard fees for FCPS packages will decrease in 2023. However, these are still avoidable fees as long as you abide by the size and weight requirements.

USPS Parcel Select Ground Rate Changes

Parcel Select shipments are ideal for heavier packages that aren’t as time-sensitive. Similar to Priority Mail, the total weight limit is 70 lbs, but Parcel Select becomes a more favorable option the closer you are to reaching that limit. There are multiple Parcel Select variations, but on the whole, this service level will see a 5.1% increase in price on average.

Similar to other USPS services, Shippo users have the ability to get deep discounts on these USPS shipping rates, specifically for Parcel Select Ground. To get an idea of the discount percentages to expect, here is just a short table of packages weighing 1-5 pounds.

2023 USPS Priority Mail International Rate Adjustments

As the name suggests, USPS Priority Mail International is the go-to service level for international shipments. This will involve the Postal Service getting your package to tons of countries outside the U.S. and then handing the package off to that country’s postal service. This service level will see an average increase of 6%. The exact rate of increase will depend on where you’re shipping from and which country you are shipping to.

Notable Structural Changes For USPS Rates

There are three key ways the Postal Service is changing how it asses its shipping costs. Two of those structural changes you may have noticed within the tables above.

Splitting Local, Zone 1, and Zone 2 into Three Different Zones

In the past, the USPS has lumped all three of these shipping zones into a single column and has charged the same rate for each. Zone 1 is a 50-mile radius from the point of origin of a package being delivered, and Zone 2 stretches as far as a 51-150 mile radius. Because of this, you may see a particularly notable difference in shipping cost for packages that have to travel to Zone 2.

USPS To Retire Priority Mail Regional Rate Boxes

This is part of a larger effort to simplify the Priority Mail rate structure and eliminate any redundancy between Regional Rate Boxes (RRB) and Priority Mail Cubic (PMC) shipments. PMC has proven to be the more popular option, offers the lowest possible rates for USPS shipping, and serves the same needs as RRBs. The only difference is that Regional Rate Boxes were free while cubic boxes are not. The Postal Service does not expect this to impact any shippers negatively. Furthermore, you can continue to use your Regional Rate Boxes until you run out.

Origin Zones Will Be Eliminated For Priority Mail International Shipments to Canada

Canada is one of the most popular destinations for U.S.-Based e-commerce merchants to send their packages. All packages shipped from the U.S. to Canada through Priority Mail International will be lumped into one origin zone. This means that if your fulfillment center is close to the border, you may see an increase in rates. However, merchants further away from the border may see a decrease in rates.

New Label Delivery Service To Be Introduced

The USPS is also introducing a new product to its line of Competitive Ancillary Services. Label Delivery Service allows postal customers to request a return label to be delivered to their home or business for a small fee of $1.25. This service is designed to make it more convenient for customers to get the proper return labels to send their products back to you.

However, it’s worth noting that e-commerce businesses using Shippo can still print return labels at the same time as shipping labels. This means you can include the return label within the package, eliminating the need for your customers to take any steps to get a return label. You won’t be charged for the return label until a USPS representative scans it.

Either path you choose, return shipping should be a breeze for you and your customers.

How Shipping With USPS Can Benefit Your Business

Despite USPS rate changes, the Postal Service will be one of your best options for shipping in 2023. Rate changes occur among all major U.S. carriers during the month of January, and the Postal Service has set the rate adjustments in line with the rest of the industry.

There are also several advantages to shipping with USPS that will continue into the new year, including:

• Reliability: USPS is committed to meeting or exceeding 95% on-time service for all mail and shipping products.
• Free package pickup: Don’t waste time waiting in line. You can schedule a USPS representative to stop by your place of business to pick up all your ready packages.
• Free shipping supplies: The USPS will still offer free packing supplies such as boxes and tape for Priority Mail packages.
• Ship on the weekends at no extra cost: The Postal Service will deliver parcels to customers on Saturdays with no added fee.
• No residential or fuel surcharges: Reach any residential address in the country and avoid additional fees that are commonly assessed by private carriers.

Shipping with USPS also comes with address standardization, and in some instances, forwarding products is also free.

Best Way To Get Cheaper USPS Rates in 2023

The best way to ship with USPS in 2023 will continue to be by using Shippo. With our latest agreement with the USPS, we can now offer the lowest USPS shipping rates possible. This means not only cheaper USPS prices when compared to retail rates, but also the possibility of getting even lower rates on certain Priority Mail Shipments.

Through our deeper relationship with the Postal Service, merchants have already seen up to 15% savings on Peak Season Commercial Pricing. Our commitment to offering more affordable USPS rates will continue throughout 2023 and beyond.

We’ll also continue to offer a wide variety of USPS shipping services, including:

• USPS Parcel Select
• USPS First-Class Package Service
• USPS First First Class Package International
• USPS Priority Mail
• USPS Priority Mail Express
• USPS Priority Mail Flat Rate
• USPS Priority Mail Cubic
• USPS Priority Mail International
• USPS Priority Mail Express International

Best of all, you have added features to speed up the label creation and shipping process. For example, you can set up automation rules to automatically print USPS labels for certain orders, print USPS labels in bulk, and have your orders scheduled to be picked up.

To see how your business can save time and money shipping with USPS, simply create a free Shippo account. Or to learn more, contact one of our friendly sales reps today.