OK so here is my theory
(seems solid enough)
We have been using shopsite since version 8 - and we have always left the packaging section in our products empty, we assigned weight but no packaging (our products weigh less than 0.1lbs per unit)
USPS always defaulted to flat rate envelope (for priority or express - our only 2 options) and this was good/normal operations for us - we can process orders of up to 10 items (more than most ever order) and fit them in the flat rate envelope
Everything was fine through the shopsite 9 and 10 upgrades, but in Jan (thanks USPS) things simply started defaulting to the HIGHEST flat rate fee (large box) instead of the lowest. SO even after updating to shopsite 11 we didn't see the lower pricing kick in.
THE FIX:
I went through every product and assigned the flat rate envelope as the shipping container, and now we are working correctly. The only problem with this is if we grow and people start placing larger orders (we hope!!!) we may have an issue with not charging enough in shipping... so if anyone has any thoughts on how to dynamically assign a shipping container based on quantity of items purchased (any KB articles out there?) that would be awesome
but for now we are all fixed
thanks Jim for all your help - it is greatly appreciated!
CKS crew