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The U.S. Postal Service is raising mail prices for most users, pushing the cost of a first-class stamp from 63 cents to 66 cents.
The new rates, which also cover other mail items including periodicals and advertising mailers, are poised to take effect July 9 unless overruled by the postal regulator.
The 5.4 percent increase across all first-class mail products is the agency’s fourth rate hike in two years. It also brings the price of a stamp, a baseline for postage products, up 32 percent since 2019, when a stamp ran 50 cents.
The price increases are part of Postmaster General Louis DeJoy’s turnaround of the mail agency, which was facing hundreds of billions of dollars in unpayable liabilities when he took assumed the role in June 2020.
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A year later, the Postal Service said it would increase rates twice annually, making up for what it said were years’ worth of artificially low rates. Sending mail in the United States is still cheaper than in nearly any country in the developed world.
“As operating expenses fueled by inflation continue to rise and the effects of a previously defective pricing model are still being felt, these price adjustments are needed to provide the Postal Service with much needed revenue to achieve the financial stability sought,” the agency wrote in a news release.
Postal finance officials also have blamed persistent inflation for increasing the agency’s costs and depressing consumer spending.
But higher rates threaten to drive down the paper mail business that keeps the Postal Service’s finances afloat. First-class mail, business mail and periodicals made up close to $41 billion of the agency’s 2022 revenue, according to its annual report to Congress, compared with $31.3 billion from packages.
Revenue from parcels includes contracts with express shipping and e-commerce firms — among them Amazon, the Postal Service’s largest customer — that send their items through the mail. (Amazon founder Jeff Bezos owns The Washington Post.)
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The Postal Service posted a $1.03 billion loss in the final quarter of 2022, putting the agency behind schedule on DeJoy’s plan to make up a $160 billion projected budget shortfall by 2030. In 2023, according to his projections, the agency is supposed to break even. In 2024, it is supposed to be modestly profitable. The Postal Service is not likely to hit those milestones, though it’s received significant financial help from Congress.
Legislation passed in 2022 wiped $107 billion in past-due and future liabilities off the agency’s balance sheet. The Inflation Reduction Act also granted the Postal Service $3 billion to electrify its fleet of delivery trucks.
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Critics of the moves say continued price increases harm the Postal Service’s financial stability.
“Rate hikes of this frequency are unprecedented and unsustainable. If left unchecked, DeJoy will plow ahead with additional stamp increases every few months, even though data shows that they put the squeeze on the American public and diminish mail volume,” Kevin Yoder, executive director of Keep Us Posted, a mailer industry and consumer advocacy group, said in a statement. “DeJoy’s rate strategy is shortsighted and needs to be rejected by the Postal Regulatory Commission in the name of protecting this critical public service.”
Source link: https://www.washingtonpost.com/business/2023/04/11/usps-raising-stamp-price-66-cents-latest-rate-hike/