What Price Priority Mail?

The U.S. Postal Service’s Priority Mail, which promises, without guaranteeing, two- or three-day delivery, appears to be pricing itself out of the catalog market — at least as an option for bulk shipments.

Earlier this year, the USPS increased Priority Mail rates 13%-20%. The cost of sending a package weighing up to 2 lbs. jumped from $3.50 to $3.95, while the price of shipping a 3-lb. parcel rose from $4.30 to $5.15. For the first three quarters of the agency’s fiscal year, Priority Mail usage has dropped 4.4% compared with last year.

“A lot of catalogers will use more of an integrated approach of Parcel Select and Priority Mail,” says Jim Cochrane, product manager, expedited package services, for the USPS, “although the rate increase has driven many of them away from Priority Mail. It’s very much a premium product.”

“Priority Mail shippers are at a real crossroads,” says Jeff Kline, president of Memphis-based Kline Management Consulting and the former operations director for Nordstrom and Genesis Direct. “A lot of catalogers in recent years had been able to use Priority Mail at rates that were lower than UPS ground for 1- to 4-lb. packages. And I have to believe that the Postal Service will have more similar Priority Mail rate increases in the future.”

Medford, OR-based food and plants mailer Bear Creek Corp., for one, has reduced its use of Priority Mail considerably because of the big rate increase this year, says Don Cato, senior vice president/general manager, customer operations. “We need to go back to UPS as well as FedEx, offer them more of our volume, and see what they kinds of discounts we can get,” he says.

Apparel and gifts cataloger Faith Mountain Co. has been using Priority Mail for its smaller packages in recent years. But although president/CEO John Lappegaard wasn’t fazed by this year’s Priority Mail rate hike, he adds that “it does weigh into the overall equation” in the Sperryville, VA-based cataloger’s review and selection of parcel carriers, which was going on at press time.

St. Louis-based Knights Ltd., whose titles include apparel books Papillon and City Spirit and furniture catalog Home Decorators Collection, has been using Priority Mail for most of its lighter apparel packages and UPS for the heavier furniture pieces. Knights, too, has its feelers out for alternatives. But vice president of operations Steve Kessler says that because the USPS supplies most of the packaging materials for the 1- to 3-lb. packages and packing tape for the women’s clothes for Priority Mail, “getting the packaging materials for free is a big part of the equation for us. Although, say, a 4-lb. package going to zone 7 is cheaper through UPS ground, we’d have to pay for the box and tape, so we have to take that into consideration.”

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