2023 USPS Rate Changes: First Wave Explained (Jan 22nd)

Shipping through the United States Postal Service just got more expensive.

For the second time in 6 months, USPS announced an increase in the prices of its service. Barely 3 months had passed after a July 2022 price increase before another round of increases was proposed to the Postal Regulatory Commission in October 2022. These new rate hikes went into effect on January 22, 2023, and there’s another expected price wave coming later this year.’

Here’s everything you need to know about these price changes and what’s to come, but more importantly, what you can do to stay ahead. Read on for a full breakdown of the 2023 USPS price rates:

New USPS Rates Effective January 22nd, 2023

“Favorably reviewed by the Commission,” USPS says their new rates increase First-Class Mail® by an average of 4.2%, but that average diminishes the real impact this will have on businesses.

If your small business uses forever stamps or purchases postage directly through your local Post Office, this price hike could significantly affect your bottom line.

2023 USPS First-Class Mail® Price Changes

• The Postal Service is also seeking price adjustments for Special Services products including Certified Mail, Post Office Box rental fees, money order fees and the cost to purchase insurance when mailing an item.

Why such a progressive increase? USPS stated in a 2021 report that it projected approximately $160 billion in losses over the next 10 years and hope to mitigate with at least 2 price increases per year until 2024.

But not all price changes are intensely hiked. USPS does have to keep an edge in the game, and they’re doing so with some heavily competitive pricing for their Priority Mail® services.

USPS Priority Mail® Flat Rate boxes and envelopes have always been popular shipping services thanks to their simplicity, free packaging, and competitive rates—regardless of package weight or destination.

But some shippers need the speed offered by USPS Priority Mail Express®. They have overnight delivery on Saturdays. Here’s a full breakdown of their prices:

If you ship packages weighing less than 1lb through First-Class Package service, price increases are minuscule. This service combines fast delivery times of 1-5 days, giving the service a real advantage in the parcel industry. Here’s a look at some of the shifts:

Big Changes to USPS Zones

Outside of price increases, the biggest changes for businesses to be aware of is that as of January 22, 2023, the local zone no longer exists. “Local” mail pieces now all fall under the zone 1 pricing structure. Additionally, USPS zone 2 shipments now have their own pricing structure.

Here’s a look at those zones from a Retail and Commercial standpoint. You can calculate your zones at: https://postcalc.usps.com/DomesticZoneChart

Certified Mail® with Return Receipt to Increase

The Certified Mail® fee increased an additional 15 cents per mail piece, while Return Receipt increased by 10 cents. The result is that the price of hard-copy receipts is costing a lot more now. The silver lining: With an electronic Return Receipt, you’ll save $1.25 on every Certified Mail piece.

2023 USPS® Extra Services

Other Important Changes to USPS Priority Mail®, Priority Mail® Express, and First-Class Packages

• Zone “Local,” 1, and 2 pricing is now being split to Zone 1, and Zone 2 pricing
• Commercial Base and Commercial Plus are being merged into Priority Mail®, and Priority Mail® Express services
• Support eliminated for USPS Regional Rate Boxes
  • This service allowed for parcels weighing up to 15 lbs (Regional Rate A box) and 20 lbs (Regional Rate B box). USPS recommends using their Priority Mail® Cubic in lieu of Regional Rate Boxes.

How can you save on shipping and mailing costs in 2023?

This year, USPS rates didn’t fully roll back from the higher prices during peak season. Leaving postage rates for Priority Mail and their other shipment services growing pricier year over year.

If you don’t want to fall behind, use these tips to stay ahead:

1. Diversify Your Carrier Mix

Is USPS the best carrier for your business’s specific needs? Diversification of carriers reduces both risk and shipping costs by utilizing the best services from each carrier for your operations. Get started with the new transcontinental offering by utilizing LaserShip-OnTrac. They provide more diversification opportunities for shippers as they expand their footprint across the U.S. with the ability to now reach 74% of the U.S. population across 30 states and Washington, D.C.

2. Think About Presort Prices

With the right mail volume, your business can take advantage of the USPS presort discounts. First-Class presorted postage pricing has increased by nearly 3 cents, but sorting invoices, bills, and statements by zip code is still advantageous and cost-effective. Now might be the best time to make it part of your mail prep process.

• Presort Price: $0.45 (5- Digit Automation Letter – 1 oz.)
• Presort postcards: $0.37 (Postcard Machinable Presorted)

3. Utilize USPS Metered Mail Rates

For small businesses and shippers sending out single-piece letters, using Metered Mail is a no-brainer money-saver. The three cents savings significantly add up PLUS, there are no mailpiece minimums. You simply print your postage online, attach your postage and drop your letters in the mail.

• Letter (up to 1oz) Retail Price: $.63
• Letter (up to 1oz) Metered Price: $.60

4. Take Advantage of Low-Priced USPS Services While They Last

Shipping rates will continue to rise, but using Priority Mail flat-rate envelopes is still the most affordable way to ship. Overall, rate shopping remains one of the top ways businesses can save their budgets. And with the right Logistics Intelligence software, you can compare carriers, service levels, and packaging pricing to stay ahead all year long.

5. Centralize and Analyze Your Shipping Data

The best way to get ahead of rising shipping prices is to have your data in a centralized place. In a Logistics Intelligence platform like Sifted, you gain complete visibility into every aspect of your shipping data, from carrier rates, accessorial fees, and your shipping health and performance.

Real-time data insight is necessary to intelligently manage your shipping operations for the best overall rates for your business. Likewise, your shipping data helps you identify hidden costs in your shipping operations—whether that’s bad addresses, inefficient packaging, poor network distribution, or not optimizing your service levels.

Clear data = smarter (more profitable) shipping.