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Mailing a letter to cost a penny more next year

By Hope Yen

Associated Press

LAST UPDATED: 04:22 p.m. HST, Oct 11, 2012

WASHINGTON » It'll cost another penny to mail a letter next year.

The cash-strapped U.S. Postal Service said today that it will raise postage rates on Jan. 27, including a 1-cent increase in the cost of first-class mail to 46 cents.

It also will introduce a new global "forever" stamp, allowing customers to mail first-class letters anywhere in the world for one set price of $1.10. Currently, the prices vary depending on the international destination, with letters to Canada and Mexico costing 85 cents.

Under the law, the post office cannot raise stamp prices more than the rate of inflation, or 2.6 percent, unless it gets special permission. The post office, which expects to lose a record $15 billion this year, has asked Congress to give it new authority to raise prices by 5 cents, but lawmakers have failed to act.

The mail agency also will increase rates on its shipping services, such as priority mail, by an average of 4 percent.

The post office, which is struggling with debt and low cash flow, said the rate hikes were partly aimed at bringing in new revenue while maintaining its pricing advantage in the shipping business. Private companies such as UPS and FedEx, which offer similar shipping services, regularly adjust their prices.

The post office lost $5.1 billion in fiscal 2011, mostly due to a 5.8 percent decline in revenue for first-class mail. Financial results are expected to be even worse when final figures for fiscal 2012 are released next month. Earlier this year, it was forced to default on two payments due to the Treasury totaling $11.1 billion for future retiree health benefits because it lacked sufficient cash reserves.

While the Postal Service has said it will continue seeking ways to cut costs, Postmaster General Patrick Donahoe has made clear that the agency has little left it can do to bring in significant new revenue. After months of congressional delay, he said it's now up to lawmakers to pass a postal fix when they return to Washington after the November elections.

The latest rate increase, for instance, will make only a small dent in the Postal Service's losses, caused by the economic downturn, movement of mail to the Internet and a congressional requirement that the mail agency fund future retiree medical benefits years in advance. Earlier this year, the mail agency floated a proposal to Congress aimed at increasing stamp prices to 50 cents as a way to generate $1 billion in new revenue.

The Postal Service has also asked Congress to allow it reduce mail delivery from six to five days a week and reduce its annual $5 billion payment for the future retiree health benefits.

The current 45-cent rate for first-class mail in the U.S. has been in effect since January. Since 2006, the Postal Service has now increased the price of the stamp five times, from 39 cents to 46 cents.

Because stamps are now being issued as forever stamps, they will remain good for first-class postage. But buying new forever stamps will cost more when the prices go up.

While the price for the first ounce of a first-class letter will rise to 46 cents, the cost for each additional ounce will remain at the current 20 cents.

Other price increases:

—Postcards will go up one penny to 33 cents.

—Priority mail, small box, $5.80; medium box, $12.35; large box, $16.85.

—Priority mail, regular envelope, $5.60; legal envelope, $5.75; padded envelope, $5.95.

—Delivery confirmation will be free on packages, including priority mail and parcel post, rather than being an extra charge.

The Postal Service, an independent agency of government, does not receive tax money for its day-to-day operation but is subject to congressional control.

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niimi wrote:
Just raise the dog-gone thing about 15 cents and make the post office run correctly. Sheesh. If that's the cost of doing business then so be it.
on October 11,2012 | 04:29PM
johncdechon wrote:
Exactly...I agree 100%. Even a 10-cent raise would do wonders, but this penny rise ever year or so is just plain s t u p i d and only prolonging the painful and slow death of the USPS. So they should raise it 10-15 cents, then get then get their act together -- and be done with it! Cut waste (lazy employees and care-less administrators/supervisors for starters) and maybe concentrate on delivering LETTERS...something UPS and FedEx (their competition, along with e-mail) don't do. Whatever, even paying 10-15cents MORE to mail a letter is STILL a bargain. So USPS: JUST DO IT and stop the band-aid "fixes."
on October 11,2012 | 04:52PM
olos73 wrote:
Postal Management can't "get their act together." That's why USPS is in this situation. Supervisors and managers get bonuses when clerks and carriers reach or surpass their goals of sorting and delivering. They get thousands of dollars in bonuses, and here, the people that do the work get a bento. Front line employees, clerks, mailhandlers and carriers, the people that handle the mail tells management when something won't work, but they will not listen. They'll do things their way, and when that doesn't work, will come up with a Plan B. Too late. Damage done, dollars lost. Management don't like it when front line people tell them what works and what doesn't. Makes them look dumb. DUH... People don't realize it, but USPS is the cheapest way to send letters and parcels. USPS is top heavy and their way of running the business is failing. If USPS was to be privatized, all these management people would be on the streets. And, they'll wonder what they did wrong. EVERYTHING...
on October 11,2012 | 07:25PM
HD36 wrote:
The Post office is officially bankrupt. It's filled with too many over paid Federal Employees. They had to sell forever stamps just to stay afloat a couple more years, but they can't do it forever.
on October 11,2012 | 05:29PM
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