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USPS to raise postal rates by 2.1% from January

Tuesday, October 18th, 2011

The US Postal Service will increase postal rates for most mail services from January 2012 – but will keep within its inflation-based price cap, it said today.

USPS filed price changes with US regulators today, including notice to raise the price of a basic stamp for 1-oz letters by one cent to 45 cents, the first price rise for the basic “Forever Stamp” since May 2009.

Additional ounces for single-piece First Class Mail letters remains unchanged at 20 cents.

Other changes set to take effect on January 22 include a three-cent increase in postcards, to 32 cents, as well as increases to international letters which rise by five cents (to 85c) for Mexico or Canada-bound letters and by seven cents (to $1.05) to other destinations. Standard Mail letter rates are to rise by 1.9%.

Among USPS service categories there will be a 2.133% rate rise for First-Class Mail, Periodicals and Package Services.

Bulk Standard Mail will see a 2.124% increase.

Price cap

USPS said the overall average for its price increase would remain under the 2.1% rate of inflation, as measured by the Consumer Price Index.

However, the Postal Service is currently waiting to see whether Congress and the White House might enact legislation to force a higher postal rate rise in order to help with its $10bn annual losses. It is also seeking a stay until December on its request for an above-inflation rate rise to help counter the effects of the recent global recession.

There are also questions over what should happen to monopoly postal products that do not currently cover their costs, contravening US postal law.

Any move to significantly raise prices could be a mixed blessing for the struggling Postal Service, bringing potentially extra income, but also the possibility of more mailers being put off from using the mail.

Postmaster General Patrick Donahoe said today: “The overall average price increase is small and is needed to help address our current financial crisis.

“We continue to take actions within our control to increase revenue in other ways, and to aggressively cut costs. To return to a sound financial footing, we urgently need enactment of comprehensive, long-term legislation to provide the Postal Service with a more flexible business model.”

Special Offers

USPS said today that from January 22, it will be offering First-Class Mail Presort customers a second ounce for free when sending presorted letters, along the lines of this year’s “Reply Rides Free” initiative.

The move aims to make the sending of bills and statements more attractive via First Class Mail, since it would allow extra materials including advertising to go inside envelopes along with transactional documents.

“This gives companies expanded opportunities to advertise new services and products to their customers as part of bill and statement mailings,” explained Paul Vogel, president and chief marketing/sales officer at USPS.

USPS also said today it is launching a new three-month pricing option for PO boxes, which might attract people to rent a PO Box for short time periods.

Encouraging parcel volumes as it expands its Intelligent Mail visibility system for commercial parcels, USPS said the Delivery Confirmation service will be free for several parcel products.

The Postal Regulatory Commission has 45 days from today to review the price proposals in order to verify they fall under the price cap as defined by US postal legislation.

Source: Post&Parcel/USPS

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