I am using Shipping rate Method 1, and have set the item's shipping rate to "E", which is set to have a first item shipping cost of $1.00 and an additional item cost of $0.20. Note that the item is not a downloadable item. I first noticed the issue when I performed a test transaction; after inputting billing information (and leaving shipping info empty) I am brought to the second Checkout screen, which says Shipping Rates are $0.00.
What should I check to verify that no setting is preventing shipping costs from being applied to the total? What else might be the issue?