This article is an extract from the Spring Edition of MER Magazine published in February 2019. You can read the full article as well as other articles from MER for free by visiting digital.mailandexpressreview.com.

Ed Weissman, Vice President Postal Affairs & e-commerce Solutions at International Bonded Couriers, Inc. explains the new Zone Based Pricing system in the US and how his company is strategically placed to help overcome it.

In January the United States Postal Service (USPS) introduced Zone-Based pricing for USA Domestic First Class Package Service along with other rate changes.  This means that where you enter your goods and ship from determines your cost.

Zone based pricing is rooted in what the industry refers to as ‘worksharing’.  By performing a portion of the work or, transportation normally provided by the USPS, the opportunity arises to save time and money.

This year, the mailing industry will have to evolve to meet the demands of the marketplace.   Over time, there’s has been a significant reduction in paper mail with explosive growth in the movement cross border parcels. Today, online shopping, strong demand for goods produced around the world, with ease of use and low cost faster service becoming the standard for delivering parcels to the door of consumers.   This high demand has led to in postal networks becoming overcrowded resulting in extensive delays that have placed a significant burden on them as well as Customs and Border Protection (CBP) to clear parcels into the US.

Increases and structural changes in pricing that add cost are not new – they take place every year but this year postage rates have been significantly affected.  This increase may take the form of introducing higher rates, Zone Pricing to some classification and Dimensional Weight pricing.  The approach can vary based on the mail classification.

One example is First-Class Package Service, for items weighing up to 13 ounces Retail Pricing and 15.99 ounces for Commercial Pricing.  This year this classification will experience a rate increase and Zone Pricing based on the number of zones the parcel passes through from the point of entry with the USPS to the destination address.    In the past, it didn’t matter where in the US it was mailed from, the charges were the same determined by the weight of the package.

This article is an extract from the Spring Edition of MER Magazine published in February 2019. You can read the full article as well as other articles from MER for free by visiting digital.mailandexpressreview.com.

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