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Shipping rates rise in 2013

UPS, FedEx and the US Postal Service are all charging more. If you want the best rate, here's what to consider.

By MSN Money Partner Jan 21, 2013 6:21PM

This post comes from Louis DeNicola at Cheapism.


Image: Delivery © George Doyle, Stockbyte, Getty ImagesYou may have heard that stamps will soon cost an extra penny, but the price of sending a package is creeping up even more, no matter which major provider you use.


Since Cheapism published its report on cheap shipping options ahead of the holiday season, both UPS and FedEx have raised their rates -- about 5% on average.


The U.S. Postal Service is poised to follow suit, with price hikes averaging 6.5% for Express Mail, 9% for Priority Mail, and 21% for Standard Post (formerly Parcel Post). When these new shipping rates take effect on Sunday, the Postal Service will still undercut its private competitors in most -- but not all -- cases.


UPS was the first to start charging new shipping rates, with increases of 5.9% for UPS Ground and 6.5% for UPS Air, effective Dec. 31, 2012. The company tempered the hikes by reducing its fuel surcharges, resulting in an average net increase of 4.9% for ground shipping and 4.5% for air service.


FedEx followed on Jan. 7, increasing rates an average of 5.9% and cutting fuel surcharges by 1 percentage point for FedEx Ground and 2 percentage points for faster FedEx Express deliveries.


When all is said and done, FedEx -- which matched UPS down to the cent for most services when Cheapism compared rates last year -- comes out ever-so-slightly cheaper than UPS, and both continue to trail the Postal Service in almost every case.


Notably, the private couriers now barely beat out the Postal Service in two scenarios from Cheapism's original shipping comparison: ground delivery of a 10-pound package to Chicago or San Francisco from New York City. (You can find more details about those shipping scenarios here.)

Even then, however, if the contents of the package fit into one of the Postal Service's flat-rate boxes or qualify for Media Mail service -- reserved for items such as books and DVDs -- those are easily the cheapest methods. Under the new shipping rates, Priority Mail Flat Rate shipping, a two- to three-day service, will go up 45 cents for small boxes, $1 for medium boxes, and $1.40 for large boxes. But the cost is the same regardless of how much a parcel weighs or where it's going. The Express Mail Flat Rate price will hold steady at $39.95 for overnight delivery.


In addition to cost, Cheapism's 2012 report considered factors such as reliability, customer service, convenience and extra services included in the price. FedEx and UPS offered the notable benefit of delivery tracking for all their services, while the Postal Service provided free tracking only for Express Mail. Now the post office will extend that service to Priority Mail and Standard Post as well.


However, with the agency on course to run out of money as early as October by some estimates, something else may have to give. A proposed cut to Saturday delivery is perennially on the table, and the chairman of the Postal Regulatory Commission has told Reuters that rapid cost-cutting measures could compromise service.


More on Cheapism and MSN Money:



Jan 22, 2013 9:47AM
yep, everything going up except paycheck figures.  They are going down because taxes are going up.  Businesses are closing with the exception of medical establishments.  They are going up.  All I see in my area being built is doctor's offices, clinics, wash out centers, and even a medical college to pump out more so called doctors to give out more FDA junk pills to addict more people to bring in more money for the legal drug lords.  I call the FDA the Future Destruction of America, here today.  People, we are becoming an addicted nation!! Look around you.  It should be scary!  No seats in any doctors' offices. All legal drug lord businesses with no parking spaces untaken.  Drive thoughs like fast food.  And we have to listen to "ask your doctor" ads constantly.  Is there a chip that would change the channel by the "a" in every "ask your doctor" ad? If so, I want one!!!
Jan 21, 2013 7:52PM
More Obama regulations getting paid for by the consumer.
Jan 22, 2013 10:38AM

I am ex usps worker,what a joke! minimal educated workers making more than teachers with masters!!!

Whats wron with this picture DUH!!!!!!

Jan 22, 2013 10:48AM
The person who wrote this article is not providing complete and accurate facts. Fact- UPS is almost 100% of the time the most expensive option and FedEx is typically 10% less. Yes the USPS is the most inexpensive but provides far and away the worst service. They are cheaper because you PAY for tracking and insurance separately. Also take into account that Priority is NOT guaranteed to be there in 2-3 days it is merely a guide and can take up to a week and half since it is NOT guaranteed. Don't even get started on customer service, have the post office "forget" to scan the package and ask them to help, good luck. We own a shipping business and use all 4 carriers, yes DHL is still around for international shipping and we tell our customers plain and simple facts. If you want cheap and don't care about the package at all ship it USPS if you do care and want it there ship it FedEx or UPS. In the end you get what you pay for with the post office.
Jan 22, 2013 11:37AM
And the USPS will continue to suffer.
Jan 22, 2013 12:16PM

When there is to much out-go and not enough income.  We all go bankrupt.

Families, Cities, Counties, State's & the Nation

As a certain book says "No one is good, no not one"

Jan 22, 2013 1:48PM
Jan 21, 2013 9:53PM
who cares, i use the usps minmally and pay most of my bills online. the usps is just another bloated incompetent gubment run entity. the only thing that has carried them til now is junk mail. think i'm wrong? try opting out of it!
Jan 22, 2013 9:43AM
Will they please raise it to an economically feasible rate!?  Each year they spend more time and money in discussing the rate increase that the rate increase can cover.  A dollar!  I would not mind spending a dollar to send an envelope across the country.  Or, Cincinnati to Louisville for that matter.  But I guess we aren't talking about envelopes are we.  The bulk of USPS revenue is from packages.  

First, until the USPS streamlines their capabilities, or bootlegs the process of their competitors, they will never compete with UPS/ FedEx.  It is impossible to operate at a profit with manual systems which pay employees 20+/hr to direct packages. Automation.... which takes time to develop and implement..... is the answer.  

Secondly, until the USPS develops it's own air carrier, it will continue to pay a premium to host airlines for delivery of packages.  Rails may be the best mode of operation  given the current price of fuel, but the lines need to be developed outside of private ownership.  That may also increase US steel production if contracted through Pittsburgh
Jan 21, 2013 10:10PM
What turnip truck did the other two posters fall off of? Shipping is the primary delivery source for much of the world today. People buy stuff and want it. The act of doing that is complex. I applaud USPS and the other expediters for all they have done and continue to do to make shipping easier to do from the seller perspective and seamless to the buyer. You Obama Haters need to get the F out of America. He won, you live in the Stone Age and Progress is a necessity.
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