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New Postal Service pricing announced

Friday, January 14, 2011

Press release from the issuing company

Washington — Postmaster General Patrick R. Donahoe today signaled a new direction in continuing to improve customer relations within the mailing industry by consulting with industry representatives on the effective date for new prices and by relaxing some guidelines on implementing Intelligent Mail services.

“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 said.

The Postal Service filed new mailing service prices with the Postal Regulatory Commission (PRC). Price increases are limited to the Consumer Price Index (CPI) cap of 1.7 percent, consistent with the Postal Law of 2006. Actual percentage price increases for various products and services will vary. It has been nearly two years since the last increase.

After consulting with key industry association representatives, the new prices would become effective on April 17, giving the mailing community more than 90 days to make the necessary technology and system changes to accurately handle the new prices.

“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.

Donahoe emphasized the value of the Intelligent Mail barcode (IMb) to mailers and reiterating the Postal Service commitment to implementing the IMb. To date, more than 41 billion pieces of mail have been processed using the IMb.

Recognizing ongoing industry concerns with challenges associated with implementing the IMb, Donahoe announced that mailers can continue to use POSTNET barcodes to qualify for automation discounts. The POSTNET code was to sunset this May to enable broad adoption and use of the IMb. There will be no Full Service Address Change Service (ACS) charges.

Single-piece, 1-ounce First-Class letters will remain 44 cents with additional ounces increased to 20 cents. The price for mailing a postcard will increase one cent. The overall increase is capped at 1.741 percent – at or below the rate of inflation as measured by the Consumer Price Index. More detailed pricing information will be available later today online at www.usps.com/prices. Today’s announcement does not affect Express Mail and Priority Mail prices.

Prices for other mailing services, including Standard Mail, Periodicals, Package Services, and Extra Services, also will change. Business mailers will see price increases in a variety of categories.

Summary of Percentage Changes by Product Category

% Change for First-Class Mail

- Single-piece Letters & Cards - 0.5%
- Flats - 5.3%
- Parcels - 3.8%
- Presort Letters & Cards - 1.8%
- International (Outbound and Inbound) - 4.0%

% Change for Standard Mail

- Letters - 1.8%
- Flats - 0.8%
- Carrier Route Letters, Flats, and Parcels - 1.4%
- High Density / Saturation Letters - 0.6%
- High Density / Saturation Flats and Parcels - 0.4%
- Parcels (NFM’s / Parcels) - 11.3%

% Change for Periodicals

- Outside County - 1.8%
- Inside County - 1.1%

The proposed price changes are expected to generate $340 million for the balance of the fiscal year and $720 million if implemented for a 12-month period.

In July 2010, the Postal Service filed an exigent price proposal that was rejected by the Postal Regulatory Commission in September. The Postal Service filed an appeal of that decision with the United States Court of Appeals for the District of Columbia Circuit in November and awaits a decision.

The urgency of the Postal Service’s current financial challenges requires this price change even as it waits for a decision from the federal courts on the exigent case.

The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.

 

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