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USPS Proposed Price Changes PDF Print

Menlo Park, California, July 15, 2010

Facing a projected deficit of nearly $7 billion next fiscal year, the Postal Service continues to aggressively pursue its action plan — outlined by Postmaster General Jack Potter in an announcement March 2 — to help USPS close a financial gap resulting from the economic recession, unprecedented declines in mail volume, increased use of electronic communications and USPS obligations to prepay retiree health benefits.

Acting on that plan, the Postal Service filed a proposal with the Postal Regulatory Commission (PRC) July 6 to change the prices of mailing services on Jan. 2, 2011. The filing seeks an average 5.6 percent price increase for its market dominant products, including First-Class Mail, Standard Mail, Periodicals, Package Services and Special Services. If approved by the PRC, the proposed price changes will raise about $3 billion in 2012.

Other highlights from the price filing include:
* First-Class Mail stamps would increase to 46 cents.
* A new Forever Stamp image will be available in October.
* First-Class Mail postcard prices will increase 2 cents to 30 cents.
* Periodicals will receive an 8 percent increase.
* Recommended increase for catalogs is 5.1 percent.
* Standard Mail parcels will increase about 23 percent.

Other actions outlined in March included changes to delivery frequency, restructuring prepayments of retiree health benefits, creating a more flexible workforce and expanding access to products and services to places more convenient to customers.

This is the first time the Postal Service is requesting price increases above the rate of inflation, an action that is allowed under the 2006 Postal law as long as the Postal Service can demonstrate “exceptional or extraordinary circumstance.”

The weak economy has sharply reduced mail volume as companies cut their advertising. At the same time there has been a significant drop in lucrative first-class mail, with more and more people turning to the Internet to communicate with each other as well as to receive and pay bills. The agency lost $3.8 billion last fiscal year despite cutting 40,000 full-time positions and making other reductions. It has continued to face significant losses this year.

The PRC has 90 days to review and make a final ruling on the filing (on or about Oct. 4). The PRC can accept or reject all price requests.

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

Link to the official USPS press release June 6, 2010: http://www.usps.com/communications/newsroom/2010/pr10_064.htm


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