Postal Service Increases Mailing Services Prices

Friday, October 21, 2011

Press release from the issuing company

Beginning early next year, it will cost just a penny more to mail letters to any location in the United States, the first price change for First-Class Mail stamps (Forever stamps) in more than two and a half years. The new 45-cent price for Forever stamps is among price changes filed with the Postal Regulatory Commission today.

Highlights of the new single-piece First-Class Mail pricing, effective Jan. 22, 2012, include:

Letters (1 oz.) – 1-cent increase to 45 cents
Letters additional ounces – unchanged at 20 cents
Postcards – 3-cent increase to 32 cents
Letters to Canada or Mexico (1 oz.) – 5-cent increase to 85 cents.
Letters to other international destinations – 7-cent increase to $1.05

Prices also will change for other mailing services, including Standard Mail, Periodicals, Package Services and Extra Services. Today’s announcement does not affect Express Mail and Priority Mail prices. More information on the new pricing is available at
http://about.usps.com/news/national-releases/2011/pr11_factsht_pricechng_1018.pdf.

“The overall average price increase is small and is needed to help address our current financial crisis,” said Postmaster General Patrick Donahoe. “We continue to take actions within our control to increase revenue in other ways and to aggressively cut costs. To return to sound financial footing we urgently need enactment of comprehensive, long-term legislation to provide the Postal Service with a more flexible business model.”

While actual percentage price increases for various products and services varies, the overall average price increase across all mailing services is capped by law at 2.1 percent, the rate of inflation calculated based on the Consumer Price Index.

For business mailers, today’s announcement offers good news for First-Class Mail Presort mailers. When the new prices go into effect on Jan. 22, the second ounce for presorted letters will be free. “This gives companies expanded opportunities to advertise new services and products to their customers as part of bill and statement mailings,” said Paul Vogel, president and chief marketing/sales officer.

And new for all customers is a 3-month pricing option to rent PO Boxes, perfect for people on the move and others who need a PO Box for a short time period.

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

Discussion

By Patrick Henry on Oct 22, 2011

Not a word is said in this rose-tinted press release about the crisis that the USPS is facing in its struggle to control periodical costs. MPA, the Association of Magazine Media, has stated, "the Postal Service’s real (i.e., inflation-adjusted) cost of handling Periodicals has increased by more than fifty percent over the last 25 years. Even the Commission’s estimate of potential cost savings, which is higher than the Postal Service’s, would leave the Postal Service’s real cost of handling Periodicals higher than in 1985." According to the MPA, a recently released study by the USPS and the Postal Rate Commission reaches unrealistic conclusions about the Postal Service's ability to address these costs. One possible remedy under consideration by the USPS: eliminate the Periodicals Class rate, forcing publishers to choose between expensive First Class and cheaper (but slower) Standard Mail. Doing away with the periodicals rate would inflict "immeasurable" damage on the magazine industry, according to the MPA. For more, see http://www.magazine.org/government/postal/periodicals_study.aspx

Discussion

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