Are you Prepared for Upcoming Changes to USPS Parcel Select and Parcel Select Lightweight on Jan 21, 2024?

Female Inventory Manager Shows Digital Tablet Information to a Worker Holding Cardboard Box, They Talk and Do Work. In the Background Stock of Parcels with Products Ready for Shipment

Big changes are on the horizon in the USPS universe, set to take effect on January 21, 2024, that are bound to create ripples across a multitude of businesses. If you’ve been using USPS Parcel Select and Parcel Select Lightweight for your shipping needs, there are many key things you need to know today. These upcoming changes are particularly crucial for e-commerce platforms, subscription services, and small online retailers who have been leveraging these services for their cost-effectiveness and efficiency. From the discontinuation of Parcel Select Lightweight to the introduction of new pricing structures and the end of free forwarding and return services, there’s a lot to unpack. Don’t worry, though – we’re here to break down these changes and guide you through everything your business needs to avoid major issues.

Major Changes in USPS Services

The USPS is rolling out changes for 2024 that will transform the way many shippers operate. Here’s a detailed breakdown of what’s coming:

Parcel Select Pricing Overhaul

  • New Pricing Increments: The USPS is introducing new weight-based pricing increments for Parcel Select Destination Entry (induction services). This includes 4-ounce, 8-ounce, and 12-ounce tiers. What does this mean? Shipments less than a pound will no longer have ounce-based pricing and will fall into one of these three categories.
  • Price Increases: There’s a 5.9% average increase in prices for Parcel Select Destination Entry.  The three-tiered pricing options will also mean that high-volume shippers with packages less than 1 lb will receive additional increases in overall shipping costs.  For example, shippers with 5-ounce shipments will now pay 8-ounce pricing and 9-ounce shipments will now pay 12-ounce pricing.

End of Parcel Select Lightweight (PSLW)

  • The USPS is discontinuing PSLW, a favorite for lighter packages and USPS induction services. Now, these will fall under the broader Parcel Select category. As detailed above, this change could mean different pricing structures for those used to the lightweight category.  Shippers currently relying on PSLW should run an updated analysis based on the new pricing structure.

Parcel Select Destination Entry Nonmachinable Parcel Changes

  • The rules for what constitutes a nonmachinable parcel are getting adjusted. The new dimensions are set at 22 inches x 18 inches x 15 inches, with a weight limit of 25 pounds. If your parcel exceeds these, it’s considered nonmachinable and subject to higher pricing and additional fees.

USPS Discontinuing Ground Return Service and Parcel Select Ground

  • In a move to streamline services, USPS is discontinuing both the Parcel Select Ground and Ground Return Service options. Shifting to the USPS Ground Advantage – Commercial offering brings a fresh approach to managing returns. To keep offering complimentary returns to your clientele, your business must be equipped to create accurate return labels, or alternatively, empower customers to generate these labels themselves via the internet. On the flip side, if opting out of free returns is your choice, it’s crucial to reassess your digital return policy and implement any required modifications.

Say Goodbye to Free Forwarding and Return Adjustments

  • One major change that most coverage of upcoming postal changes has overlooked is the removal of free forwarding and return services for Parcel Select and some other services. Users of USPS Marketing Mail, Package Services, and Parcel Select parcels will now incur separate charges for forwarding and/or return to sender services. This is a significant shift, especially for businesses relying on these services for customer satisfaction.

USPS Pricing Structure Changes for 2024

  • As detailed in their updated Policies and Procedures online, USPS is making a significant change to how it calculates prices for its Parcel Select services in 2024 and beyond. Previously, Parcel Select Destination Entry and Parcel Select Lightweight had different pricing methods, but now they’re being unified. This means both services will follow the same four components for determining shipping costs: Destination Delivery Unit (DDU), Destination Hub (DHub), Destination Sectional Center Facility (DSCF), and Destination Network Distribution Center (DNDC). The stated goal is to create a consistent and straightforward pricing system across different Parcel Select services.
  • USPS is simplifying its pricing structure for all parcels as well. Before, parcels that couldn’t be sorted by machines (nonmachinable) had a separate pricing table. Now, this separate table is being eliminated. Instead, there will be one comprehensive pricing table for all parcels, regardless of whether they’re machinable or not. This table covers a wide range of weights, from 1 to 70 pounds, and includes oversized packages. The goal here is to make it easier to understand how much shipping will cost, no matter the size or type of your package.

Changes to USPS Returns Service Account Holders

  • A new mandate for USPS-certified labels is in place. If you’re using noncompliant labels, get ready for additional charges based on the retail price of the mail class or an IMpb noncompliance fee. This is critical for businesses relying on return services to manage customer exchanges and returns.  Make sure to review how your business is generating labels for outbound and return shipments to ensure you are compliant.

These changes are more than just a few lines in an email from USPS; they’re a significant shift in how businesses will handle shipping. For companies shipping lots of small and lightweight packages, staying informed and adapting quickly will be key to maintaining efficiency and cost-effectiveness in shipping operations.

Impact on Shippers and Types of Businesses Affected

The upcoming USPS 2024 changes are prompting a crucial reassessment for a myriad of businesses, especially those who have leaned heavily on the Parcel Select Lightweight and free forwarding and return services. This includes a diverse array of companies from subscription box providers, who dispatch a variety of items monthly, to retailers of small, lightweight products such as jewelry, phone accessories, and cosmetics. Here are a few of the companies that will want to review the USPS changes with a postal shipping expert as soon as possible:

Businesses Typically Using USPS Parcel Select Lightweight (PSLW)

  • Subscription Box Services: Monthly subscription services, sending out boxes of cosmetics, snacks, or books, have found a sweet spot with PSLW. The shift to a higher-priced category could force them to rethink packaging or pricing strategies.
  • Jewelry: Items like necklaces, bracelets, and earrings are small, lightweight, and extremely popular in online marketplaces.
  • Phone Accessories: This includes items like phone cases, screen protectors, and charging cables.
  • Cosmetics and Beauty Products: Small items like lipsticks, eyeliners, and compact powders are widely sold online.
  • Fashion Accessories: Items like sunglasses, watches, and hair accessories.
  • Stationery: Pens, notebooks, stickers, and other small office supplies.
  • Small Electronics: USB drives, earbuds, and mini flashlights.
  • Keychains and Small Toys: Novelty items, collectible keychains, and small action figures.
  • Craft Supplies: Beads, threads, small tools, and other crafting materials.
  • Health and Wellness Products: Dietary supplements, essential oils, and small fitness gadgets like resistance bands.
  • Greeting Cards and Small Art Prints: Lightweight and easy to ship, these items are popular for gifts and personal use.

Businesses Relying on Free Forwarding and Return to Sender Services

Similarly, businesses that have capitalized on the free forwarding and return services, like online fashion retailers and dropshipping ventures, are now confronting the reality of significantly increased shipping costs. This change threatens to impact their operational budgets and could necessitate a strategic overhaul of their address verification practices and return policies.  Here are a few categories that need to be aware of these new fees:

  • Online Retailers: Many online stores, particularly clothing and footwear retailers, offer lenient return policies to attract customers. The added costs for forwarding and returns could lead to increased operational costs or a reevaluation of their return policies.
  • Dropshipping Businesses: These businesses, which rely on forwarding services to send products directly from suppliers to customers, will now face additional costs, potentially affecting their lean business model.
  • Print-on-Demand Services: Companies offering customized products, like printed books, apparel, or gifts, often depend on forwarding services for efficient distribution. The new fees could mean a rise in shipping costs for customers or a dent in the businesses’ profits.

Impact of Additional Fees

  • Increased Operational Costs: The additional fees for forwarding and return services will directly increase the operational costs for these businesses.  Businesses relying on these critical free services will need to review how they factor these new costs into their customer pricing.
  • Need for Efficient Address Verification: With the elimination of free forwarding, businesses must ensure accurate shipping addresses. Incorrect addresses will now incur additional costs, emphasizing the importance of reliable address verification processes.
  • Find Better Software Solutions: Businesses might need to explore a new software platform to manage their shipping process.  There is an immediate need for a software system that helps avoid wrong addresses and eliminates the need for return to sender whenever possible.

These shifts in USPS policy serve as a pivotal moment for businesses to refine their shipping strategies. It’s no longer solely about opting for the most economical shipping choice; it’s about deploying intelligent and strategic methods to prevent unnecessary shipping expenses from significantly impacting profit margins. While these changes pose certain challenges, they also present unique opportunities for businesses to innovate and enhance their shipping operations, turning potential obstacles into avenues for growth and efficiency.

TEC Mailing Solutions Delivers Better USPS Shipping Solutions

In the face of these USPS changes, ParcelPrep emerges as a staunch ally in the fight against rising shipping costs, especially completely avoidable additional fees.. Let’s dive into how their services can not only help you navigate these choppy postal waters but also thrive in them.

Exclusive Verify and Confirm Service

  • Prevent Wrong Deliveries: Our Verify and Confirm service is like a dedicated assistant double checking every address on every parcel or mail piece your company sends.  It uses the same National Change of Address database that USPS does. This means before your parcel even leaves your hands, you’re assured it’s heading to the most up-to-date address available for every recipient.
  • Reduces Address Errors: Address errors are more than just a hassle; they’re now a cost risk. TEC Mailing Solutions’s Verify and Confirm service significantly reduces the chances of address-related mistakes or typos, which can lead to those pesky additional fees for forwarding or returns.
  • Enhances Customer Satisfaction: Imagine the joy of your customers receiving their orders without a hitch. This reliability in deliveries can boost your brand’s reputation for efficiency and customer care.  It also reduces the calls and emails to your customer service department.

Deliverability Index Score

  • Predictive Analysis: Think of the Deliverability Index Score as your shipping crystal ball. Our proprietary Deliverability Index automatically assesses the likelihood of successful delivery based on various factors, including address accuracy and historical delivery data.
  • Cost Savings: By predicting delivery success, you can proactively address potential issues, saving on costs associated with returns, re-shipping, or lost parcels.
  • Data-Driven Decisions: With this score, you’re not just shipping; your team is automatically making informed decisions on every shipment. This level of insight allows you to optimize your shipping strategy, potentially shifting to more cost-effective methods or carriers where appropriate.

With ParcelPrep, you’re not just countering the USPS changes; you’re setting a new standard in shipping efficiency and customer satisfaction. Their Verify and Confirm service and the innovative Deliverability Index Score transform the complexities of postal adjustments into strategic advantages for your business. ParcelPrep can be the key to turning USPS changes from potential headaches into opportunities for enhanced growth and streamlined efficiency.

Real-World Impact of Better Address Verification and Deliverability Score

With impending USPS transformations, it’s vital for companies to adopt a nimble and forward-thinking approach. Staying ahead in the game isn’t merely about responding to these shifts, but rather about foreseeing them and thoughtfully strategizing in advance. ParcelPrep is a crucial ally for better shipping and mailing solutions, especially when it comes to postal optimization. Our strength lies in providing bespoke solutions designed to meet the distinct needs and challenges of every business we partner with.

TEC Mailing Solutions offers much more than just cost savings. Our true value is found in boosting your business’s operational effectiveness and elevating customer contentment. By utilizing TEC Mailing Solutions’s advanced tools, companies can not only respond swiftly to the current postal changes but also future-proof their shipping strategies. As the landscape of shipping and mailing continues to evolve, having TEC Mailing Solutions as a strategic partner ensures that your business is well-prepared to navigate and thrive amidst these changes. Reach out to TEC Mailing Solutions and discover how they can customize their solutions to streamline your entire shipping and mailing operations, transforming potential challenges into opportunities for growth and efficiency.

Parcel Prep