The US Postal Service filed notice today with the Postal Regulatory Commission (PRC) requesting rate increases to take effect August 29, 2021.
The filing impacts only “Market Dominant” rates, not “Competitive” rates. (Rates for Priority Mail, commonly used by online sellers, is not impacted, for example).
The proposed price changes would raise overall Market Dominant product and service prices by approximately 6.9 percent.
The price of a letter stamp will increase from 55 cents to 58 cents; an outbound international letter will increase from $1.20 to $1.30.
Media Mail/Library Mail rates will increase by 10.865 percent, which is higher than the class average of 8.804 percent. The Postal Service said it was applying Package Services’ largest price increase to Media Mail/Library Mail “because that product has the lowest cost coverage in the class (79.3 percent)” (see the USPS filing – PDF format).
Today’s move was expected, according to an article published 2 days ago in Government Executive, which quoted Art Sackler, executive director of the Coalition for a 21st Century Postal Service, a group of large-scale mail users like Amazon and the National Newspaper Association:
““Rate hikes, paired with decreased service, will drive many U.S. companies away from using USPS for their business, or, in some cases, out of business altogether,” Sackler said.”
Sackler was referencing the USPS’s plan to slow the speed of First Class Mail. As part of its ten-year strategic plan, the USPS is modifying service standards for First-Class Mail letters and flats from 1- 3 day States to 1-5 day service.
Or as some are saying, you’ll pay more for slower service.
The Postal Accountability and Enhancement Act of 2006 had limited rate hikes for dominant mail – the average increase for each class of mail could not be greater than the rate of inflation (as explained in this 2010 blog post). But that changed in November 2020, and the USPS noted in its announcement that the price changes announced today were “in accordance with approvals provided by the PRC last year.”
The USPS did not address rates for competitive services in today’s announcement. Last year, it raised shipping rates during the crucial holiday shipping season as a “planned temporary price adjustment” that were in effect from October 18 through December 27, 2020.
You can find today’s announcement on the USPS website.
The Washington Post reported on the rates, adding, “Also Friday, the agency sent out “reduction in force,” or layoff, notices to hundreds of management-level employees.”