Postal Service shipping costs to rise in 2014

It will cost a little extra to ship that package to the family during the holidays next year if the United States Postal Service gets its way.

The USPS announced Thursday (Nov. 14) that it would increase prices on Postal Service Shipping Services by 2.4% effective Jan. 26, 2014, should the Postal Regulatory Commission (PRC) approve the rate hike.

Some of the new prices for shipping are as follows:
• $19.99 for retail flat rate, padded flat rate and legal flat rate envelopes priority express;
• $44.95 for flat rate boxes priority express; and
• Prices starting at $5.60 for domestic priority flat rate products.

Postal Service customers will also have a new choice for shipping domestic Priority Mail Express next year, according to a press release from the USPS.

"The new delivery service option will allow customers to send domestic Priority Mail Express packages to most locations in the U.S. by 10:30 a.m. for an extra $5.00 feet," it said. "Domestic Priority Mail Express is a fast, reliable service which offers day-specific delivery information, up to $100 free insurance and free package tracking."

The impact will not only be felt by individuals using the Postal Service, but also business owners.

Jerry Walrod, owner of Walrod's Hardware in Fort Smith, said he does not expect a large impact though he has to compensate for any increases for getting merchandise into the store and on the shelves.

"Yes, it does affect the price that I put on the merchandise. And yes, I have raised it over the years," he said. "But not necessarily enough (to compensate for the higher freight costs)."

Walrod said he often uses UPS for his shipping needs or uses True Value Hardware's private trucking line to receive merchandise as a way to save on costs instead of using the Postal Service. Using True Value's line, he is charged a 6.93% up charge on merchandise.

And even though many shoppers think hardware stores are overpriced, he said he always tries to keep his prices low and not always pass on the full cost of freight to his customers.

"I'm not going to gouge my customers," he said. "But when things get tight, I do know that some of my competitors (will raise) their prices big time."

Even with the impacts his business could feel should he have to rely on the Postal Service for any shipping next he, he said customers should not expect any increases on Jan. 26.

"I don't raise my price until I have to re-buy it," he said, adding that he would still be unlikely to raise the prices to compensate for the full amount he his family-owned business is set back due to the rise in shipping prices.

Nagisa Manabe, chief marketing and sales officer at the Postal Service, said even with the increase USPS has proposed, she believes the Postal Service is one of the lowest priced shippers in the nation.

"The Postal Service remains the best in value in the shipping business," she said. "We continue to offer excellent domestic Flat Rate shipping with a price that doesn't vary by destination."

The Postal Service last proposed a price increase in September, asking that the cost of first-class stamps rise to 49 cents in 2014. The planned increase announced in September and this month are an attempt by the Postal Service to plug a $20 billion budget gap, the service said at the time.