Postal Updates

USPS plans price hikes two times a year starting in 2023

Sep 16, 2021, 11 AM

By Bill McAllister, Washington Correspondent

The United States Postal Service plans to increase stamp prices next in July 2022 and will begin to boost prices twice a year in 2023, warning the increases may be steep.

The decision to accelerate to a twice-a-year schedule prompted criticism from mail industry groups, with the Alliance of Nonprofit Mailers labeling it “a death spiral accelerator” for the financially troubled federal agency.

The USPS said in a Sept. 14 statement it would not be making the expected increase in rates on its “market dominant” products in January.

In an effort to help customers better prepare for the twice yearly increases, the USPS said it would skip the January rate increases.

Beginning in January 2023, the biannual “price adjustments” will occur in January and July, the USPS said.

The affected market dominant products include first-class mail, marketing (advertising) mail, periodicals, package services and special services. These are services in which the USPS holds a monopoly.

In a filing with the Postal Regulatory Commission, the agency said it “intends to be judicious in the use of available pricing authority, but anticipates the prospect that, given our current financial condition, the price change for each market dominant class may be required to apply most or all pricing authority available on the date of filing.”

That suggests that the agency may seek to use the additional rate authorities that the PRC has allowed it above the previous inflation cap on prices.

The Alliance of Nonprofit Mailers seized on that statement in a Sept. 15 bulletin to its members, saying: “We assume USPS will use the full pricing authority it has at any moment.”

Stephen Kearney, the alliance’s executive director and a former postal executive, told Linn’s that the announcement comes as major mailers are complaining that their output is being “affected negatively by paper and labor shortages and degraded postal services.”

“When you pile on relentless postage rate increases with no regard to the demand side, it’s a formula for a downward spiral,” Kearney said.

One thing that troubled Kearney about the announcement was that the biannual rate increase plan occurred with “no consultation with anyone outside the postal agency.”

In 2007, when the agency moved to basing its rates on an annual price cap, Kearney said the USPS had an extensive dialogue with mailers about the change.

Kearney said the failure to consult with mailers “demonstrates complete indifference by the postal agency to keeping captive mailers in the mail.”

He also blamed the biannual rate decision on the Postal Regulatory Commission, saying the PRC “created this opportunity for postal management. It shows no sign of mitigating it.”

The twice-per-year rate hike decision was revealed a day after a three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit in Washington, D.C., sharply questioned a protest by mailing groups over the Aug. 29 stamp price increase that was above the rate of inflation.

The judges seemed to endorse the way the Postal Regulatory Commission had revised its procedures to allow higher stamp prices.

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