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U.S. Postal Service requests price hikes for 2014

September 25, 2013 Areawide, Business No Comments
U. S. Postal Service spokesperson Christine Dugas on Town Talk, explains the Postal Service's financial problems and possible solutions. Photo source: CTV14

U. S. Postal Service spokesperson Christine Dugas on Town Talk, explains the Postal Service’s financial problems and possible solutions. Photo source: CTV14

Press Release

The United States Postal Service (USPS) announced today (Sept. 25) it has proposed price changes that include upping First-Class stamps from the current 46 cents to 49 cents each.

The proposed changes, which would go into effect in January 2014, are intended to generate $2 billion in incremental annual revenue for the USPS, which has been trying to climb out of deep budget shortfalls.

The USPS does not receive federal funds; its services are supported solely from revenues from its products.

For an in-depth look at the postal service’s financial situation – specifically a $20 billion budget gap – and how the federal government has contributed to its problems, watch a Town Talk interview with the regional representative in the CTV14 archives.

Click on this link http://www.ctv14.com, then click on the Programming tab and choose VOD Archives from the drop-down menu – on the next page, use the drop-down menu on the left (All Folders) to choose Town Talk and scroll to the U.S. Postal Service interview (Sept. 6 2013).

Among the new First-Class prices changes proposed by the USPS effective Jan. 26, 2014 are the following:

  • Letters (1 oz.) — 3-cent increase to 49 cents
  • Letters (additional ounces) —  1-cent increase to 21 cents
  • Letters to all international destinations (1 oz.) — $1.15
  • Postcards — 1-cent increase to 34 cents

The USPS press release states that, “Stamp prices have stayed consistent with the average annual rate of inflation of 4.2 percent since the Postal Service was formed in 1971.”

The release also states that pricing for Standard Mail, Periodicals, Package Services and Extra Services also will be adjusted as part of a filing submitted to the Postal Regulatory Commission (PRC) scheduled for Sept. 26.

The Governors of the Postal Service voted Sept. 24 to seek price increases above the typical annual increases associated with changes in the Consumer Price Index (CPI).

In a letter sent to customers today, Board of Governors Chair Mickey Barnett described the “precarious financial condition” of the Postal Service and the “uncertain path toward enactment of postal reform legislation” as primary reasons for seeking price changes above the CPI increase.

“Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges,” said Barnett in the letter.

“However, if these financial challenges were alleviated by the timely enactment of laws that close a $20 billion budget gap, the Postal Service would reconsider its pricing strategy,” Barnett said.

“We are encouraged by the recent introduction of comprehensive postal reform legislation in Congress, and despite an uncertain legislative process, we are hopeful that legislation can be enacted this year,” he said, referring to current legislation that requires the USPS to bank several million dollars toward retirees health care benefits.

The Postal Service recorded a $15.9 billion net loss last fiscal year and expects to record a loss of roughly $6 billion in the current fiscal year.

The U.S. Postal Regulatory Commission will review the prices before they become effective Jan. 26, 2014, and must agree the prices are consistent with applicable law.

The full text of the Board chairman’s letter sent to postal customers about the pricing decision will be available later today at the following link:

http://about.usps.com/news/national-releases/2013/pr13_chairman-letter.htm

About the USPS

A self-supporting enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation: 152 million residences, businesses and Post Office Boxes.

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.

With more than 31,000 retail locations, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 percent of the world’s mail.

If it were a private-sector company, the U.S. Postal Service would rank 42nd in the 2012 Fortune 500.

Follow the Postal Service on www.twitter.com/USPS and at www.facebook.com/USPS.

Posted September 25, 2013 based on a press release as added to by HTNP News Editor Brenda Sullivan

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