Navigating USPS Parcel Select Rate Increase: What Sellers Need to Know

In this episode of Parcel Perspectives, host Glenn Gooding, delves into the imminent changes looming over the small parcel shipping industry, with a specific focus on the proposed parcel select rate increase by the United States Postal Service (USPS), set to take effect on July 14, 2023. Postmaster General Louis DeJoy has proposed rate hikes ranging from 23-70%, a move that could significantly impact postal aggregators such as DHL eCommerce, UPS Mail Innovations, and others. Glenn provides a detailed explanation of parcel select, its current operational dynamics, and the key role it plays in the shipping market. The potential effects of these increases on e-commerce shippers, particularly those shipping lightweight products to residential destinations, are scrutinized, with an emphasis on the double-digit cost increases they may face.

To help shippers navigate these challenges, Glenn outlines several mitigation strategies. He suggests exploring alternate carriers, such as FedEx Ground Economy and UPS SurePost, which could offer more favorable terms and help cushion the financial blow. The potential of regional carriers is also discussed as a viable alternative, provided shippers have the requisite volume and geographic alignment. Additionally, Glenn highlights the necessity for proactive communication with carriers like DHL eCommerce, UPS Mail Innovations, and others to understand their plans and develop contingency strategies in anticipation of the upcoming changes.

Glenn Gooding, the episode's host, is the President of iDrive and has a rich history in the small parcel shipping industry, spanning 37 years. His career began with a major carrier where he worked as an operator and industrial engineer, eventually managing pricing at high levels for large, complex shippers. Recognized as a national thought leader, Glenn has helped shape strategies for clients ranging from Fortune 50 companies to startup e-commerce businesses. This expertise positions him well to provide insightful analysis and actionable advice, aimed at helping shippers stay competitively aligned in an increasingly complex and costly market.