The U.S. Postal Service (USPS) has announced it will no longer offer discount rates on certain packages.
Announced on September 11, USPS said it will no longer offer discounted rates through Negotiated Service Agreements (NSAs) for packages entered by consolidators at Post Office Delivery Units.
The USPS has the authority to engage in NSAs. These are personalized contractual arrangements between the Postal Service and mailers, which can offer customers exclusive rebates, discounts, or pricing options in exchange for higher mail volumes and increased revenue.
“The Postal Service has been implementing a new strategic approach with respect to its contracts with package consolidator companies—ones that consolidate large volumes of packages for entry into various points of the USPS network,” a September 11 release from the USPS reads. The service said that such contracts “no longer reflect operational and financial realities in today’s market, the Postal network, or USPS’ refreshed product offerings.”
“As we engage in the process of modernizing our network, we are also changing our product and pricing strategies to ensure that they are aligned with our operating model and goals,” said Postmaster General Louis DeJoy. “As one part of this new approach, we have decided that it is appropriate to make changes to how we utilize NSAs in the provision of our Parcel Select product.
“In that regard, to more effectively utilize our network and realize enhanced economies, we no longer intend to provide discounted rates through NSAs that incent parties to aggregate mail volume from multiple shippers and to bring such volume directly to our delivery units.”
The USPS has announced several changes to its services in recent weeks.
USPS said in a statement issued on August 22 that it “plans to improve mail processing and transportation” across the nation, meaning some customers will see improved delivery times. However, those who live in more rural areas may see a slowdown in delivery services.
“Depending on location, time and distance, expected time to deliver will increase for some ZIP code pairs,” the release reads.
A spokesperson for USPS told CBS MoneyWatch that, under the proposed changes, mail delivery would continue to follow the current service standard of two to five days. They mentioned that most mail from rural areas is already delivered in three days or less, and this is expected to largely stay the same.
The USPS also announced it would be increasing peak season posting costs, covering Thanksgiving, Christmas and New Year—a practice implemented every year.