U.S. Postal Service will ask for 3% to 4% increase, insiders say
Preliminary plans that could raise postage rates between 3% and 4% on average next September are under way at the U.S. Postal Service.
USPS officials, who in August began briefing the Board of Governors about the need to generate new revenue, aren’t saying how much of an increase they’ll seek whenthey file their next rate case later this year.
However, industry insiders predict that the USPS will ask for a hike of between 3% and 4% to generate some $2 billion in new revenue. The USPS, which ended the last four years with a surplus, says it needs this sum to keep it in the black.
The postal service expected to end the fiscal year last month with a $200 million surplus. Since 1995, when the USPS posted a whopping $1.8 billion surplus, it’s seen the amount slide to $1.6 billion in 1996, $1.2 billion in 1997 and $500 million last year.
Gene Del Polito, president of the Advertising Mail Marketing Association, predicts a 7% increase for Standard A flats, but “much less” for Standard A letters, especially if they’re presorted by carrier route.
First class mail will go up a penny to 34 cents, Del Polito predicts.
Nonprofit mailers are worried that their rates – which by law are lower than commercial rates – will increase dramatically, says Lee Cassidy, National Federation of Nonprofits executive director.
“We’re concerned because our rates are artificially high and we’re trying to get them rolled back,” he says.
Del Polito, Cassidy and others also believe that the USPS will seek a significant boost in mailing rates for newspapers, magazines and certain nonprofit publications.
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