May Is a Good Time to Reassess Your Shipping Needs

While most small businesses choose to use e-mail or cell phones for quick communication, those who still use snail mail will soon be feeling the pain in their wallets. The U.S. Postal Service is increasing shipping rates beginning May 12.

The cost of sending a first-class letter will go up 1 cent to 42 cents, but the so-called "forever" stamps that currently sell for 41 cents will remain valid after the increase. If you buy any "forever" stamps after May 12, they will cost you 42 cents each.

The USPS said it had 5 billion forever stamps on hand in anticipation of high demand for them before the increase.

The postal service is increasing some rates for Express Mail by switching to a zone-based pricing system -- that means customers will pay less for nearby destinations, but more for longer distances. Customers can get a 3 percent price reduction by buying Express Mail online or through corporate accounts, according to the Post Office.

The parcel return service will move to a weight-based pricing system, which probably will work out well for you if you sell feather boas, but could be a problem if you're retailing, say, stained glass windows or stone bird baths.

The Post Office also announced that its "Parcel Select" service, which it defines as a "last mile" delivery service to every door will offer pricing and volume incentives for large- and medium-sized shippers. There's no mention of small firms receiving a similar kind of preferential treatment.

The Post Office is allowed to adjust its mailing rates each May, but by law its prices can't increase more than the rate of inflation as defined by the Consumer Price Index.

There are obviously other package shippers out there and the major firms have special packages for small businesses. The month of May might be a good time to take a look at your shipping accounts and reassess the firm you're using. They are all easy to find and compare online.

By Sharon McLoone |  May 7, 2008; 9:55 AM ET Tools and Tips
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