U.S. first-class stamp to cost 63¢ beginning Jan. 22
By Bill McAllister, Washington Correspondent
The price of a United States first-class stamp will rise 5 percent on Jan. 22, from 60¢ to 63¢.
That was the expected result of a Nov. 28 ruling by the Postal Regulatory Commission that approved a 4.2 percent increase for all categories of mail.
Under the ruling, the following price increases will be in effect starting Jan. 22.
Metered 1-ounce letters will rise to 60¢ from 57¢.
Domestic postcards will increase to 48¢ from 44¢, and international postcards will rise to $1.45 from $1.40.
The rate for 1-ounce international letters will increase to $1.45 from $1.40.
The rate for an additional ounce on first-class domestic mail will remain at 24¢.
Prices for some first-class bulk mail will rise by as much as 24.1 percent, the Postal Regulatory Commission said.
Overall, increases for first-class mail, marketing mail, periodicals, package services and special services will be about 4.2 percent, the USPS said.
The 218-page Postal Regulatory Commission ruling was a significant victory for Postmaster General Louis DeJoy who has pressed for twice-a-year rate increases at the maximum percentages allowed by law.
Asked to comment on the decision, DeJoy defended the price increases.
“The Postal Service has been severely damaged by at least 10 years of a defective pricing model,” he said.
“We need to use our authority to adjust market dominant product pricing as part of our Delivering for America plan to become self-sustaining, as required by law,” he said.
“The Postal Service continues to have some of the lowest letter mail postage rates in the industrialized world and also continues to offer a great value in shipping,” DeJoy said.
Objections to the increases had come from several major mailing groups, but all their complaints were effectively rejected by the five-member Postal Regulatory Commission, which endorsed DeJoy’s rate policies and said no to slowing down increases.
In its ruling, the Postal Regulatory Commission countered that “nearly all of the rate authority in this proceeding ... is a result of the increase in inflation” and would have been available to the U.S. Postal Service under the old rate-making procedures.
As for some increases that may exceed previous levels, the Postal Regulatory Commission said it had “targeted the new forms of rate authority to address discrete sources of costs over which the Postal Service does not have direct control.”
The Postal Regulatory Commission defended its ruling by noting that it had previously held that the Postal Service’s “financial stability had not been achieved because total revenue had been inadequate to cover total costs.”
Therefore, the Postal Regulatory Commission said it agreed with the Postal Service’s pleas for increased revenues now. It cited the Postal Service’s suffering “a cumulative net loss of $59.1 billion and defaulting on its required payments to the federal treasury.”
“The commission found that providing additional rate authority to mitigate the near-term financial pressure on the Postal Service is necessary to lead to financial stability,” the Postal Regulatory Commission said, citing a previous decision.
Mailing groups were upset by the Nov. 28 decision.
Art Sackler, a spokesman for the Coalition for a Twenty-First Century Postal Service, said the Postal Service’s fiscal health is dramatically better than the ruling suggests.
Sackler noted the infusion of billions of federal tax dollars to help the USPS, and he said the Postal Service’s current cash holdings are much improved from when the Postal Regulatory Commission released a 10-year study of the USPS in 2020.
“What I find frustrating is the PRC’s dismissal of genuine concerns over the frequency and magnitude of increases as being beyond the scope of the proceeding,” said Michael Plunkett, president of the Association for Postal Commerce.
“Whether rates proposed by the Postal Service are just and reasonable would seem to me to be an essential area of inquiry any time the Postal Service chooses to exercise its monopoly pricing power,” Plunkett said.
Stephen Kearney, executive director of the Alliance of Nonprofit Mailers, said: “The regulator is stuck in the trap it set during the 10-year rate review [of the USPS]. It is focusing on only one objective, giving the Postal Service adequate revenue.”
“This singular focus leads it to overlook equally important objectives, such as the impact of rate shocks on customers and incentivizing better cost control and service by the USPS,” Kearney said.
The Postal Service’s revenue plan also includes raising the service fees for stamps ordered from the Stamp Fulfillment Services center in Kansas City, Mo.
The Postal Regulatory Commission approved boosting the fee for orders up to $50 from $1.50 to $1.55. The fee on orders of more than $50 will rise to $2.20 from $2.10.
The fees on international orders will increase to $8.30 for orders up to $50 and $8.95 for orders valued at more than $50
The Postal Service’s newly released 2023 Integrated Financial Plan says price increases are critical for the USPS this year due to an expected drop in mail volume.
The report says the increases “will more than compensate for the revenue loss due to reduced volume.”
In fiscal year 2023 (which began Oct. 1, 2022), the report predicts USPS revenues will rise by $2.4 billion, or 3 percent, to $81.2 billion, up from $78.8 billion in fiscal year 2022. The report also predicts the USPS will show a $4.5 billion loss in 2023.
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