USPS seeks pricing power for commercial first-class parcels
The USPS is asking regulators for permission to switch Commercial First Class Mail parcels from its market-dominant service category to its competitive products portfolio. The move would give the US Postal Service more flexibility in pricing and negotiating lightweight parcels for commercial customers in order to compete with other parcel shippers in the US, it said.
In a filing to the Postal Regulatory Commission yesterday, the USPS asked to set up a new “Lightweight Commercial Parcels” category in its competitive product list.
The move would only apply to parcels from commercial mailers, leaving single-piece retail First-Class Mail Parcels in the reserved area, where pricing is more protected.
In its filing, the USPS said leaving the single-piece parcel service in the market-dominant list would provide an alternative to the commercial parcels service, effectively setting a cap on pricing in the new competitive category.
The USPS also argued that since other companies were already “effectively” competing for shipment of merchandise like prescription drugs, it would not be able to raise prices for the Lightweight Commercial Parcels service significantly “without risking the loss of a significant level of business”.
“This product serves a highly competitive marketplace, with many participants offering similar products,” said Gary Reblin, vice president, Domestic Products. “By moving to a competitive product classification, we have greater flexibility to make this offering more attractive to commercial shippers.”
The request to re-classify Commercial First Class Mail Parcels followed on from a similar request made last August to transfer some Standard Mail Parcels to the competitive product list.
For commercial parcels, from April 17 the USPS intends to offer Commercial Base pricing for parcels weighing 13 ounces or less, and Commercial Plus pricing for parcels weighing less than one pound.
Adult signatures
Separately yesterday, the USPS also asked the PRC for permission to set up new “Adult Signature” services, where shippers can request that items be delivered only with an appropriate signature from a recipient over the age of 21.
Two options are requested – an Adult Signature Required service, which requires only proof of age from a recipient, and an Adult Signature Restricted Delivery service that requires proof of age and ID, for items to be delivered only to the named addressee.
The services are to be offered for Express Mail, Priority Mail and Parcel Select services for commercial and online customers only.
The USPS said it would allow it to compete for shipments that require a verified signature for legal reasons or to protect privacy or security for, for example, high value shipments.
Prices proposed are $4.75 per piece for the Signature Required service and $4.95 for the Restricted Delivery service, with the USPS anticipating around $20m in revenue from the new offerings.
