Starting Jan. 22, first-class mail (Forever) stamps will likely cost one cent more, from the current 44 cents to 45 cents. Other postage rates will be increased as well to compensate for the United States Postal Service’s (USPS) financial crisis.
Letters with additional ounces are unchanged at 20 cents, postcards will have a three cent increase to 32 cents, 1 ounce letters to Canada or Mexico will have a five cent increase to 85 cents and other international letters will have a seven cent increase to $1.05.
“The overall average price increase is small and is needed to help address our current financial crisis,” said USPS Postmaster General Patrick Donahue in a statement. “We continue to take actions within our control to increase revenue in other ways and to aggressively cut costs.”
According to the USPS, the postage increases were filed with the Postal Regulatory Commission (PRC) on Oct. 18. The PRC has 45 days to review the prices to verify they comply with the 2.1 percent price cap for each class of mail.
Matthew Chlosta, media relations specialist for the PRC said the commission is currently viewing the USPS’s request for alterations to the postage rates.
Augustine Ruiz, a USPS media contact for California, said the USPS is suffering from a national loss in volume. He said the postal service lost more than 20 percent of their overall volume, from their height of 213 billion pieces in 2006 to 167 billion pieces this year.
With the loss of volume comes the loss of revenue. To combat this, the USPS has actively been cutting costs.
“We have been reducing employment ranks by 110,000 employees, closing post offices and doing consolidation studies of post offices and processing facilities,” Ruiz said. “There are approximately 3,600 post offices around the country to study to see the possibility of closing them and about 482 mail processing facilities that we’d like to get down to 200 nationally.”
Ruiz said that in this way, it is able to save on utilities and transportation. He said at the moment, they are waiting on United States Congress to help them remain viable.
“What we’re going through is things that are out of our control and things that are in our control,” Ruiz said. “What we can control is having Congress pass a number of bills that address key issues; what we can’t control is the usage of the internet.”
The USPS has a pre-funding requirement, a law passed in 2006, in which every year they have to pay $5.5 billion toward retiree health benefits. Ruiz said Congress is currently looking into giving the USPS relief from it. He said that they have to be returned over $7 billion in overpayment to the retiree health system as well.
The combination of the technologically advancing nation and the ongoing recession has resulted in the negative impact on mail volume.
One bill authored by Reps. Darrel Issa (R-Calif.) and Dennis Ross (R-Fla.) known as the Issa-Ross Postal Reform Act, has been approved by the Oversight and Government Reform Committee and is currently standing before the House of Representatives.
“The bill would make structural reforms to the postal service and reduce operating expenses so that the postal service can be profitable again and meet its obligations to employees, retirees and taxpayers,” said Communications Adviser of the Oversight Committee Ali Ahmad. “The postal service’s most profitable product is first-class mail. Ninety percent of first-class mail has historically been business-related communication, which includes putting a check in the mail to send to a power company or banks sending statements.”
Ahmad said there is now a rapid diversion from paper to paperless, meaning more Americans are paying through online or non-paper means. He said banks and credit card companies who are actively encouraging people to switch to non-paper statements isn’t the issue since that’s just technological process.
“The problem is the postal service is unable to adapt to the fact that volume is down,” he said. “Congress also mandates that they deliver every day but Sunday and for years we’ve wanted to adjust that.”
As the second largest civilian employer behind Wal-Mart, the USPS has excess infrastructure that the Postal Reform Act will address.
“We’re not looking to bail out, we just need to get the mail out,” Ruiz said.
CLAIRE TAN can be reached at email@example.com.