Postage Rates Set to Increase in January

21 Jul

Earlier this month, the Postal Service outlined the content of the price increase it filed with the Postal Regulatory Commission.

Overall, the increase will average 5.6%.

First-Class Mail will rise 5.4% on average.  The price for retail letters and cards will increase two cents each; presorted letter prices will increase an average of 2.1 cents, with no change in the additional ounce rate.  FCM presorted flats will jump about 12%, on average, while a new rate band for FCM parcels will apply the same price through three ounces.

Standard Mail prices will increase an average of 5.6%.  The increase for letters and flats will be about 5.0% and 5.1%, respectively, while CR will go up 4.9%, and HD/Saturation letters and flats/parcels will increase by 4.8% and 4.4%, respectively.  STD parcels will jump 23.3%, however, because they currently do not cover their costs.  Other classification changes were as well.

Periodicals will increase by 8%, less than enough to move them to profitability.

Package Services will increase 7%, except for BPM flats that will rise only 5%.

Special Services will go up an average of 5.2%.

The Postal Service acknowledges the price increase will impact customers, but expects the total net benefit of the higher prices to be about $2.3 billion, an amount that will reduce the agency’s anticipated FY2011 loss to about $4.7 billion.

The formal filing was completed on July 6th, and the PRC has 90 days to respond (i.e., by October 4).  Implementation is planned for January 2, 2011.

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