Price increases expected to generate $2 billion in new revenue to improve financial situation
WASHINGTON — The United States Postal Service today announced proposed price changes, including an increase in the price of a First-Class Mail single-piece letter from 46 cents to 49 cents. The proposed changes, which would go into effect in January 2014, are intended to generate $2 billion in incremental annual revenue for the Postal Service.
Highlights of the new single-piece First-Class Mail pricing, effective Jan. 26, 2014 include:
· Letters (1 oz.) — 3-cent increase to 49 cents
· Letters additional ounces — 1-cent increase to 21 cents
· Letters to all international destinations (1 oz.) — $1.15
· Postcards — 1-cent increase to 34 cents
Stamp prices have stayed consistent with the average annual rate of inflation of 4.2 percent since the Postal Service was formed in 1971.
Pricing for Standard Mail, Periodicals, Package Services and Extra Services also will be adjusted as part of a filing to the Postal Regulatory Commission (PRC) scheduled to take place Sept. 26.
The Governors of the Postal Service voted Sept. 24 to seek price increases above the typical annual increases associated with changes in the Consumer Price Index (CPI).
In a letter disseminated to customers today, Board of Governors Chairman Mickey Barnett described the “precarious financial condition” of the Postal Service and the “uncertain path toward enactment of postal reform legislation” as primary reasons for seeking price changes above the CPI increase. He also indicated that the price adjustment above the CPI increase is necessary in order to ensure that the Postal Service will be able to maintain and continue the development of postal services of the type and quality which America needs.
“Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges,” said Barnett in the letter. “However, if these financial challenges were alleviated by the timely enactment of laws that close a $20 billion budget gap, the Postal Service would reconsider its pricing strategy. We are encouraged by the recent introduction of comprehensive postal reform legislation in Congress, and despite an uncertain legislative process, we are hopeful that legislation can be enacted this year.”
Except in exceptional or extraordinary circumstances, postage price increases are capped at the rate of inflation as measured by the CPI-U. The Postal Service is filing a price increase above CPI-U due to extraordinary and exceptional circumstances which have contributed to continued financial losses. The Postal Service recorded a $15.9 billion net loss last fiscal year and expects to record a loss of roughly $6 billion in the current fiscal year, and has an intolerably low level of available liquidity even after defaulting on its obligation to make prefunding payments for retiree health benefits.
The PRC will review the prices before they become effective Jan. 26, 2014, and must agree the prices are consistent with applicable law. The new price proposals are scheduled to be filed Sept. 26 and will be available on the PRC website at www.prc.gov and also will be available at http://pe.usps.com.
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The full text of the Board chairman’s letter sent to postal customers about the pricing decision
Time will decrease revenue as baby boomer pass on to postage due section when they pass from existence. USPS customer base decreases as younger humans use electronic communication in every aspect from greeting communication, direct online banking, and general correspondence. Parcel business is primary means to create revenue starting now. Operating cost effective such as eliminating waste in eliminating services that only ignorant politcans, craft union and management groups whose only concern is for themselves and their monetary situation at the present.
Eliminating 6 day street delivery should be the starting in eliminating waste as Americans would endorse this.
A postage rate increase is centless(sic) as there are no benefits for the long term as revenue generation will decrease and cost will continue to expand.
I can keep the price of a stamp down stop bringing in my my supervisor seven days a week ten hours a day doing absolutely nothing. …. he hasn’t been in a non-pay status for at least 6 years !!wtf!!!!
Big D well said….Congrees is the problem and the president isn’t helping by dividing the country…
MANAGMENT ALL JERKS ALL THE TIME SCREWING THE RANK AND FILE
Nice job driving away even *more* customer, you mgmt. morons.
But then, you’ve *never* gave a damn about the customers anyway. In your eyes, they’re nothing but a nuisance.
Ship is sinking and continue to create leaks to hasten descent. Revenue created from this approach will not cover operation cost as too many high priced EAS, District and Headquarters STAPH that exceed needs. Demand for product and services will not increase revenue. Cost effective operations in reducing work hour, transportation, and wasted rental-utility cost must be reduced. Street delivery 6 days a week is a total wasted forced on American public by ignorant politics, and greedy high level management and union officials. A comedy of errors.
amen mongo!!!!!
Sounds like a privated PO.
Congress will only do something when they absolutely have to, when it has reached the crisis level. Then they will put a stop-gap, band-aid on the problem, duck making any real, long term solution and walk away. God forbid they take a stand and have a voting record on a real issue, because they are afraid they might be held accountable. It’s all duck and weave, platitudes and kick the can down the road for someone else whenever possible. Gutless wonders. Both parties. Goal # 1 – getting re-elected. Everything else is secondary. They only respond to three things: campaign money, lobbyists and votes. Everything else is window dressing.
Even at 49 cents, a letter from Maine to Hawaii is a ridiculous bargain. What do you think FedEx would charge for that? APWU recently put out a chart that showed the equivilent cost for sending a 1st class letter in Japan and the major European countries. It’s in the ballpark of about 80 cents. How far do you have to go from one end of Germany to the other? 500 miles? People that will inevitably bitch about this increase are whinners. Do they really think transportation costs have gone down? You will have all the special interest “stake holders” pissing and moaning and talking doom and gloom whenever there is a rate increase. You know, the American Greeting Card Association and the Direct Mail Marketing Association.
I remember when greeting cards recently used to be under $ 2. Now, they are $ 3, 4 and $5. They don’t have any problem jacking up their prices. What a bunch of hypocrites. On a percentage basis, they are ones really gouging the public. As far as third class or “standard” mail put out by the direct mailers, they are such a powerful lobby that their rates don’t even allow USPS to make any money on the billions of pieces it has to process. Take a look at any USPS financial statement and you’ll see we make next to nothing on handling all this stuff. They keep claiming they will take their ball and go home (not mail) if the rates are moved up even in the slightest, but a recent OIG report showed it’s nonsense. Take a look at the profit margins of some of these companies – you would be shocked, despite all this poor mouthing about their postage and printing costs. Somebody is blowing smoke here. The rate commision needs to get real. Better yet, give back the rate setting to USPS where it should be.Let USPS determine what market rates should be. Too much micromanagement and special interest lobbying going on here. Also, Bill Burrus’s pet peeve, about all the pre-sort discounts given to major mailers that is a big scam and a loss of major revenue is true.
The big mailers and the general public only need to look at Congress for this increase. Constant gridlock in not only this but anything they do is the common theme time and time again. A GOP lead by Mr. Issa is the essential brick wall in front of you. Compromise doesn’t seem to be a word taken seriously for the good of all people as a whole. The postal service has tried in vain to have congress remove the ball & chain for some time now so they could get back to solvency and avoid a price increase to mailers. I don’t understand why they couldn’t have passed a modified bill on agreeable points. This would have made a starting point in which the postal service could have started from. Even with contingencies it’s better than nothing. Again, we must look at congress who started the postal service into this financial downward spiral in the first place and the lack of a conclusion that would be beneficial for all Americans who need a viable postal service. Now with a debt ceiling crisis looming which as the recurring theme indicates will go down to the wire this agenda is a passing thought. What would our founding fathers think of these greedy, careless, unconscionable, individuals we have today?