U.S. Postal Service
Announces New Prices for 2014
Price increases
expected to generate $2 billion in new revenue to improve financial situation
WASHINGTON — The United
States Postal Service today announced proposed price changes, including an
increase in the price of a First-Class Mail single-piece letter from 46 cents
to 49 cents. The proposed changes, which would go into effect in January 2014,
are intended to generate $2 billion in incremental annual revenue for the
Postal Service.
Highlights of the new
single-piece First-Class Mail pricing, effective Jan. 26, 2014 include:
·
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
Stamp prices have
stayed consistent with the average annual rate of inflation of 4.2 percent
since the Postal Service was formed in 1971.
Pricing for Standard Mail, Periodicals, Package Services and Extra Services
also will be adjusted as part of a filing to the Postal Regulatory Commission
(PRC) scheduled to take place 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
disseminated to customers today, Board of Governors Chairman 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. He also indicated
that the price adjustment above the CPI increase is necessary in order to
ensure that the Postal Service will be able to maintain and continue the
development of postal services of the type and quality which America needs.
“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. 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.”
Except in exceptional
or extraordinary circumstances, postage price increases are capped at the rate
of inflation as measured by the CPI-U. The Postal Service is filing a price
increase above CPI-U due to extraordinary and exceptional circumstances which
have contributed to continued financial losses. 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, and has an intolerably low level of
available liquidity even after defaulting on its obligation to make prefunding
payments for retiree health benefits.
The PRC will review
the prices before they become effective Jan. 26, 2014, and must agree the
prices are consistent with applicable law. The new price proposals are
scheduled to be filed Sept. 26 and will be available on the PRC website
at www.prc.gov and also will
be available athttp://pe.usps.com.
The Postal Service
receives no tax dollars for operating expenses and relies on the sale of
postage, products and services to fund its operations
