Business and Marketing

The Postal Service takes advantage of new dimensional pricing to seize commercial package and shipping business.

Ever since UPS announced it would join Federal Express in a move to dimensional weight pricing, the Postal Service has been itching to capitalize by pitching itself as the low-cost option in the package and shipping business. This week, the pitching began in earnest.

A direct mail piece mailed to U.S. businesses pictures a one-foot cube box said to contain a pound of merchandise and warns senders they'll get charged for 11 pounds if they use the “wrong shipping company.” That's a veiled reference to FedEx and UPS, which will move from weight to size-based pricing at the end of the year. Eleven pounds is the maximum weight that can be shipped in a cubic foot box, according to a standard industry dimensional factor.

As Mike Comstock, executive director of Ursa Major Associates, remarked when FedEx and UPS announced the dimensional pricing changes, “If you're shipping dumbbells the new pricing system works fine. But things like boots and diapers will be much more expensive to ship.”

“Starting in 2015,” reads the copy in the Postal Service mailer, “you may pay for dimensions rather than actual weight with FedEx Ground and UPS Ground.” An accompanying chart spells out the potential cost savings of shipping with Postal Service. Priced by size, a kid's backpack would ship for $9.11, but would only cost $7.17 by weight with USPS, a 27% savings. Toy trucks would merit up to a 32% savings, and toasters as much as 35%.

The piece includes a tear-off business reply card offering a free shipping kit and an invitation to speak with a USPS sales agent.

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