Postage Rate Increase...Again!

The United States Postal Service has announced yet another rate increase. This increase will become effective May 14, 2007. The new rate for first class stamps will be .41 cents per letter. Priority mail will increase from $4.05 to $4.60. The USPS submitted the request in May of 2006, just 4 months after received a 2 cent increase that raised postage from .37 cents to .39 cents.

Along with this increase, the USPS also received approval for a "Forever Stamp". The Forever Stamp will sell at the new .41 cent rate beginning in May of this year. This stamp can be used forever to mail first class letters and will always maintain the value of the one ounce letter rate. Regardless of how many rate increases occur the "Forever Stamp" will never require additional postage. It would be advisable for consumers to purchase a large number of these stamps when they become available to prevent feeling the effects of future rate hikes.

The request of the USPS to increase the Priority Mail Flat Rate Box from $8.10 to $9.15 was denied by the Board of Governors, and is currently being reconsidered. The pricing chart made public on the USPS website lists separate pricing for First-Class Mail, Wedding Invitations, Postcards, Priority Mail, Express Mail, Parcel Post, Bank Statements, and Utility Bills. This list may be viewed by visiting the USPS website.

In recent years we've seen numerous price increases from the USPS. These increases are intended to cover the cost of the services they offer, however these hikes have some frequent mailers frustrated. A large number of people use the USPS to ship products they have sold at internet venues like eBay, one of the largest online marketplaces. These people are concerned that the rate hikes will affect their sales. Buyer's frequent eBay in search of a good deal, when a potential buyer sees a high shipping cost the sale can be lost.

The USPS has reported on their website that when fuel prices increase one cent their costs increase $8 million dollars. The postal service wants to be very clear that the organization receives no tax dollars from any source. The agency is self supporting and the increase is solely to raise revenue to pay expenses.

It would seem though, rather than proposing rate hikes so frequently, that the postal service would search for ways to cut expenses. If postal increases continue at the rate they have, the postal service is going to price themselves out of business. Many consumers have already switched to competing companies like UPS (United Parcel Service), FedEx (Federal Express) or private couriers for their package shipping. The USPS boasts that it employs nine million people. Like any organization, there are surely some non-essential positions that could be changed from full time to part time. There are boundless ways in which costs could be cut. Maybe the Board of Governors should hire a consulting firm to find ways to cut costs rather than pass the increase on to us.

The Postal Service contends that mail is "big business". A breakdown of yearly mailing costs by cateorgy is published on the USPS website. It breaks down as follows: Correspondence & transactions - $36 billion

Business advertising - $18.9 billion

Expedited delivery - $5.5 billion

Publications delivery - $2.2 billion

Standard package delivery - $2.2 billion

International mail - $1.8 billion.

One would think that with all those billions of dollars worth of business that this organization could make ends meet without raising rates so often.