USPS to raise postal rates, relax barcode deadline

US postmaster-general Pat Donahoe met with mailer groups today to discuss new postal rates and the move to next-generation barcodes. The consultation was part of a “new climate” in customer relations he is seeking to implement at the US Postal Service after taking over the leadership at the start of the year.

“Working together as an industry we can address continuing economic challenges in a way that allows the Postal Service to generate much needed revenue while being more responsive to ongoing customer needs,” Donahoe insisted.

Following the meeting, the USPS announced increases to postal rates that will take effect from April 17.

The date gives the mailing community more than 90 days to make the necessary technology and system changes to accurately handle the new prices, the Postal Service said.

The loss-making Postal Service said price increases to First Class and Standard Mail were expected to generate $340 million in extra revenue for the rest of its fiscal year and $720 million for an entire 12-month period.

Separately, the USPS is awaiting a court verdict on its appeal against the refusal by federal regulators to allow it to increase prices by more than the CPI cap. The USPS filed its appeal with the United States Court of Appeals for the District of Columbia Circuit in November regarding the decision by the Postal Regulatory Commission.

The Postal Service said the urgency of its current financial challenges meant it needed to implement the CPI-capped price changes before the federal courts issued a decision on its exigent rate appeal.

Today’s rate increases were also filed with the federal Postal Regulatory Commission.

Price changes

The price changes do not affect Express Mail or Priority Mail, and will leave single-piece First Class letters under one ounce unchanged at 44 cents for retail customers.

For consumers, changes include a three-cent increase to additional ounces for First Class letters to 20 cents per ounce. Postcards will cost 29 cents to send, a one cent increase, while letters to Canada and Mexico increase to 80 cents.

Prices are also set to change for Standard Mail, Periodicals, Package Services and Extra Services.

Business mailers will see price increases in a variety of categories, with a 0.5% increase in single-piece First Class letters and cards, and a 1.8% increase in presort First Class letters and cards. Saturation mail prices rise 0.4-0.6%, while non-machinable surcharges remain unchanged.

Among the biggest price increases are the 5.3% increase to First Class flats, 3.8% increase to First Class parcels and 4% increase to First Class international mail, while Standard Mail parcels will see an 11.3% price rise.

However, the overall increase is restricted to the Consumer Price Index cap of 1.7%, as required by the 2006 PAEA law, the USPS said.

“We have made every effort to keep the impact minimal for consumers and customers doing business with us at retail lobbies,” said Donahoe. “We will continue to balance our business needs against the needs of our customers.”

Intelligent Mail

An outcome of the meeting with mailer groups today has seen the postmaster-general accepting that business mailers are having some difficulties switching over to new Intelligent Mail barcode (IMb) systems from the old POSTNET system.

Donahoe has decided to effectively scrap the May 2011 deadline for mailers to switch to the IMb system and continue qualifying for automation discounts.

“We heard concerns that we were moving too fast on discontinuing POSTNET coding, and we will continue to offer the automation prices for mail with POSTNET barcodes beyond May 2011,” Donahoe said.

The IMb barcode system is the next-generation technology for USPS to sort and track letters and flats, using barcodes that contain more information than previous POSTNET and PLANET code systems.

So far more than 41 billion pieces of mail have been processed using the IMb, and the organization is still pushing for mailers to use it instead of POSTNET.

A spokesperson for USPS said it has not been decided how long the dispensation for POSTNET barcodes will be, only that the May deadline is no longer in effect.