ADDITIONAL USPS RATE HIKE APPROVED FOR JANUARY 2014

As business mailers headed home to enjoy the Christmas holiday, the Postal Regulatory Commission announced on Christmas Eve its approval of the USPS full 4.3% request for an exigent rate increase effective in late January. Mailers will now be paying 6.0% more for postage, inclusive of the original 1.7% increase approved last month.

The USPS requested the emergency exigent rate increase based on the financial harm caused by the “Great Recession” of 2008-2009 as the exceptional circumstance necessitating this rate case.

The only saving grace of the decision is that the increase is limited to two years, after which it is determined the loss of $2.8 billion due to the recession between 2008 and 2011 should be fully recovered. The USPS sought a permanent rate increase that would have brought in $1.8 million annually.

For the average consumer, First Class postage will increase by $.03. A First Class stamp will cost $.49. In addition to First Class mail, the higher rates will apply to Standard Class business mail, catalogs, advertising mail, magazines, newspapers and bills.

The USPS lost $5 billion in the last fiscal year, an improvement over the $15.9 billion loss in 2012. Legislation to reduce or eliminate the annual $5.6 billion pre-funded health-care retiree benefit payments, eliminate Saturday delivery, and giving the USPS more flexibility to raise money remains stalled in Congress. The USPS said the exigent rate increase was a “last resort” due to failed attempts for legislative relief.

By comparison, Canadians are looking at a 35% rate increase in March, 2014. The price of booklets of First Class stamps will increase from $.63 to $.85, while single stamps will go from $.63 to $1 each.

The USPS rate increase is scheduled to be implemented January 26th.