![]() ![]() This might be the last year as Parcel Select will likely eclipse in 2017. Priority Mail (PM) is the section leader with 51.7% of the revenue, down from 56.1 in 2015. Despite a 9.5% increase in prices in January, this sector still increased revenue by 15.8% on 13.8% volume growth. While Shipping and Packages represented a mere 3.3% of total postal volume in F2016, it rang the bell with 24.2% of total postal revenue, up from 2.9% of volume and 21.9% of revenue in F2015. Fiscal 2016 Financial Results (SEC 10K filing 11-15-2016) ![]() How did Shippers react to the much larger January 2016 rate change? Fortunately, yearend financials were recently released. International economy products used primarily by consolidators and high volume shippers include International Priority Airmail (IPA), International Surface Airlift (ISAL) and Airmail M-Bags which are increasing 3.8%, 3.9% and 4.9% respectively. Single unit pricing remains unchanged except for Global Express Guaranteed (GXG) which is increasing 4.9%. ![]() Collectively known as “Consolidators”, these companies perform and enjoy “workshare Incentives” from the Postal Service for: collection, sortation, transportation and induction deep within the USPS network for final mile delivery. Shippers are more likely to recognize popular brand names like UPS SurePost, UPS Mail Innovations, FedEx SmartPost, Newgistics, OSM Worldwide and DHL SmartMail. The highest volume service within Shipping and Packaging is Parcel Select, although many may not recognize the name. The Post Office delivers more than 50% of all residential packages. CPP shippers will still enjoy a flat 3% discount off Commercial Base Pricing (Base), even though the USPS advised last year that they planned to eliminate CPP in 2017. One of the changes we did not see was the elimination of the Commercial Plus Pricing (CPP) for PM. ![]() To gain a more insightful perspective, we compared the pricing year over year and the cumulative changes since January 2014. While the announced average increase for Priority Mail (PM) is 3.9%, a deeper dive reveals that there are a lot of variations across weights and zones. After a rather substantial price increase shippers absorbed in the beginning of 2016, industry is faced with another “non-linear” domestic rate change on January 22, 2017. ![]()
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