USPS to seek above-inflation postage rate increase for 2014

[POSTMAN]

The US Postal Service has announced plans to bust its inflation-based price cap with a 6.5% increase to retail stamp prices for First Class Mail, and a 5.9% increase for business rates.

The rate increase is subject to regulatory approval, and could still be avoided if Congress can pass comprehensive postal reform by the end of this year.

The cash-strapped federal agency is hoping the move will generate an extra $2bn in revenue each year when it takes effect from 26th January 2014.

The basic stamp price for First Class single letters will go up from 46c to 49c. Additional ounces will cost an extra 1c, rising to 21c.

Postcards will see a 1c increase, to 34c, while international letters to all destinations will be priced at $1.15.

Business mail rates for monopoly products will also increase, by 4.3% above the 1.6% rate of inflation.

USPS will have to make a request to regulators to make an “exigent” rate rise, as ordinarily it is limited in its rate increases to the annual rate of inflation.

The last attempt to make an exigent rate increase, on the grounds that the recession had decimated USPS profitability, was rejected by the Postal Regulatory Commission, since a recession was not seen as sufficiently extreme a circumstance to trigger the price cap get-out clause in US postal legislation.


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