First-class letters and other mail will be more expensive to ship starting Saturday, Jan. 25. The Postal Regulatory Commission (PRC) has allowed the United States Postal Service (USPS) to temporarily increase stamp prices to 49 cents, a 3-cent increase. The PRC counter proposal came after the agency struck down the USPS’ drive for a permanent increase.
According to a USPS press release, the new 2014 postal prices are expected to generate $2 billion for the agency. A 1 oz. letter will cost 49 cents to mail; 1 oz. letters to all international destinations will cost $1.15, and sending postcards
will cost 34 cents, a 1-cent increase. Shipping packages will increase 3 to 6 percent, depending on weight and type of delivery. The USPS claims stamp prices have had a 4.2 percent annual inflation rate since 1971.
Goin’ Postal Co-owner Lucy Valeriano said while increasing the price by 3 cents is quite a bit, she doesn’t expect the increase to impact shipping too much.
“With FedEx and UPS, you’re looking at roughly 8 to 9 bucks to ship a letter,” Valeriano said. “Via the post office, it’s still 49 cents.”
Still, the 3-cent increase is the biggest spike Valeriano has seen in recent years from the USPS.
The PRC has set a May time limit for the USPS to develop a plan to eliminate the temporary price increases. USPS Board of Governors Chairman Mickey Barnett called upon Congress to make financial reforms to help make the USPS more financially stable.
“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 on USPS.com. “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.”
According to the Washington Post, the last 3-cent increase came in 2002. Between declining volumes of mail to deliver and being forced to pay more than $5 billion a year for healthcare costs, the USPS has been struggling to eliminate financial losses since the 2008 recession.
Businesses dependant on the USPS understand the need for increased revenue but don’t see the temporary prices increases as progress toward a solution.
“The longer the Postal Service and lawmakers avoid reducing core costs for the delivery network, the more pain will be inflicted upon all who use the mail,” National Newspaper Association President Robert Williams said in a press release. “Fewer and fewer customers will be paying more and more. This approved postage increase solves nothing.”