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The U.S. Postal Service will begin offering volume- related price incentives for Express Mail, Priority Mail and other shipping services on May 12.

These incentives were made possible by the Postal Accountability and Enhancement Act which, among other things, enables the USPS to better compete in the shipping market.

“Clearly for Express Mail, they’re going to a zone structure similar to what UPS and Fedex have,” said Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association. “They’re even giving discounts for getting the postage online, so there’s some discounts there to match the competition.”
He added that the new rates clearly favor mailers that drop-ship products and do not rely on postal transportation.

Currently, postal customers pay the same price per piece regardless of the number of packages sent or the method of payment. As of May 12, they will be able to take advantage of commercial volume pricing, minimum volume rebates, online price breaks and other pricing incentives. For example:

* Express Mail, the premium overnight delivery service, is switching to an industry standard, zone-based pricing system. This will result in lower prices for closer destinations. Also, customers will receive a 3% price reduction by purchasing the service online or through corporate accounts. Up to an additional 7% price reduction is available for those who meet quarterly volume minimums. But the USPS will start charging for Sunday delivery.

* Priority Mail, the USPS’s expedited delivery service, will be available at an average 3.5% savings to customers who use electronic postage or meet other requirements.

* Parcel Select will feature pricing and volume incentives for large- and medium-sized shippers.

* Parcel Return Service will move entirely to a weight-based pricing system, resulting in significant price reductions for lighter packages.

Cerasale noted that the USPS is "subject to market forces" in these product categories.