Postal Rate Commission Prepares to Announce Rate Decision

TBO.com ^ | 3/21/02 | Randolph E. Schmid

[Tumbleweed_Connection]

Battered by the terrorist attacks and slipping business, the post office appears on the verge of getting some help: permission to raise rates.

The independent Postal Rate Commission is scheduled to announce a decision Friday on a proposal including an increase in first-class rates by 3 cents to 37 cents.

The new rates, which would affect just about every class of mail, could take effect as soon as the end of June.

The Postal Service suffered a $1.68 billion loss last year and was anticipating a deficit of $1.35 billion even before the anthrax mailings and terror attacks forced it to spend hundreds of millions of dollars on cleanup and efforts to sanitize the mail.

The agency halted new building projects last year, has eliminated more than 12,000 jobs and applied for the rate increase now being acted on.

Originally planned to take effect in the fall, the rate commission speeded up its consideration of the increase after the post office and its major mailers reached an agreement on the amount and timing of the increase.

That left the commission with little opposition to sort through, thus allowing it to rule now rather than months later in the year.

The only vocal opponent of the increase came from one of the post office's larger unions.

The American Postal Workers Union, which represents workers who sort mail, argued that the rate increases offered giant mailers discounts for presorting their mail that exceed of the costs the Postal Service avoids by not having to do that work.

In addition to the 37-cent rate for the first ounce of first-class mail, other increases requested by the post office included:

-Increase the post-card rate 2 cents to 23 cents.

-A 1-pound priority mail item would rise 35 cents to $3.85.

-Increases in parcel post. A 5-pount item costing $4.19 to $7.25 now, depending on distance, would rise to $5.03 to $9.43.

-A half-pound Express Mail item would jump $1.20 to $13.65.

-Certified mail would increase 20 cents to $2.30.

-Insurance charges would go up for most mail, depending on amount of insurance, but would be reduced for Express Mail.

-The charge for a return receipt would go up 25 cents to $1.75.

[Revolting cat!]

Just as long as getting shot by a disgruntled postal employee stays free of charge, it's all right with me!

[Willie Green]

Can anybody ever remember them deciding to LOWER rates???

[Tumbleweed_Connection]

Use your email.

[ctdonath2]

Gee, might part of their decline in business be due to high prices? When stamps went to $0.34, I went to on-line bill payment, cutting my USPS usage by at least 95%. Making me pay an additional 3 cents for a stamp won't cover the loss from me not buying $3.70 in stamps in response.

Supply and demand rules. Raise the price, demand drops. It's getting cheaper for me to pay the bill in person.

[Atlas Sneezed]

Isn't it about time that they made all postal rates multiples of 5 cents? It is a pain for small businesses to keep all the stamps on hand, then use up obsolete ones every few months when they change rates. Set rates at .35 first class, .25 each additional ounce, 25 postcard, and relax until you need to raise something a nickel. Then, I can keep a stock of $1 stamps, .35's, .25's, and .05's, and be able to make any postage, even if rates change.

[Maven]

Last month, we switched all our priority mail to Federal Express. Not only is Fed Ex more reliable, it's less expensive - particularly insurance. Fed Ex charges 35 cents per $100 value, with the first $100 included, while the Post Office charges $1.10 for the first $50, $2.00 for $100 and $1.00 for each $100 thereafter.

For example - I had a customer buy about $1,300 worth of items this week. It would have cost about $20.00 to use the U.S. Post Office, and only $8.50 for Fed Ex.

Also, my customers get tracking numbers from Fed Ex, and they never have to wonder where their items are. They love it, and so do I. Oh, and Federal Express picks up the packages at my office, so I don't have to haul them anywhere.

I've already told Federal Express that if they offer a $2.00 ground/home small packet rate, they can have almost all of what used to be my first class mail, too.

Maven

[steve-b]

I swear, these people avoid simple round numbers on purpose -- jumping over 30 cents, and now over 35.

But they're a monopoly, and don't have to give a damn how much petty inconvenience they create.

[kellynla]

"monopoly?" au contrare...you have UPS, FEDEX, Fax and of course email...the Post Office should be put on the auction block to the highest bidder and let UPS and FEDEX compete for the business.

[TexRef]

the Post Office should be put on the auction block to the highest bidder and let UPS and FEDEX compete for the business.

Better yet -- auction up parts of the business (maybe 1/2 and 1/2) -- and allow all winning bidders the ability to deliver mail to ANY US address. That way you can use whichever service you want to deliver letters, bills, packages, etc. to any US address.

Of course, then the US couldn't use the USPS as yet another federal police agency.

[hattend]

But some of us with no street addresses and only a PO Box (bush country Alaska) have to shop elsewhere because you can't ship to us, now.

It would be great if businesses would put that up front so I don't have to go through 6 pages of order entry only to enter my credit card number and then find that the package can't go.

Not relevent to the topic...just a little on-line customer rant. Carry On. :-)

[curmudgeonII]

If the Post Office goes up to 37 cents, it'll be one cent for delivery.

And 36 cents for storage.

[Tumbleweed_Connection]

When are they going to resist the idea of total government control and allow private industry to run this properly?

[Revolting cat!]

"monopoly?" au contrare...you have ...etc

Au contraire your au contrare! The USPS has a monopoly use of the mail box on your private property, don't you know? In fact, you could have that Mexican gardener who drops his leaflets into neighbourhood mailboxes arrested quicker for this particular crime than for immigration laws violations.

[kellynla]

the point I was making which I am sure you understood was that you have other means of sending your mail ex: FEDEX, UPS, EMAIL AND FAX...we haven't mailed our invoices and/or letters of communication via the Postal Service in ten years.

[fnord]

As was pointed out 200 years ago, only an idiot (or government) would think you could recover lost business by raising prices, lol.

[ctdonath2]

The great irony is that the USPS is a businessman's dream: practically a private company (gets no money from gov't, operates pretty much independently), pays no taxes, has a gov't-protected monopoly, provides an indespensible infrastructure. Of course, with everything going right beyond anyone's wildest dreams, they're screwing it up.

[Flying Circus]

Tho post office is becoming obsolete, raising rates will only drive customers irreversibly to newer and less expensive internet communications. When I want to send a letter, 99.9% of the time I use email now. I move every bill I can to online payment, not only do I not need to pay the price of the stamp, I don't have to find a mailbox, worry about if the check will arrive, and can conduct the entire transaction without leaving my desk.

As it is, most of what I get in the mail is junk, which brings my biggest question from this news: what is happening to the bulkmail rate and are they raising the rate for junk noone wants?