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Postal Service to Adjust Prices, Extends POSTNET Barcode Use

January 13, 2011
WASHINGTON, DC—Jan. 13, 2011—The first U.S. Postal Service has filed new mailing service prices with the Postal Regulatory Commission (PRC). Price increases are limited to the Consumer Price Index (CPI) cap of 1.7 percent, consistent with the Postal Law of 2006. Actual percentage price increases for various products and services will vary. It has been nearly two years since the last increase.

The prices filed with the Postal Regulatory Commission today will become effective April 17.

Highlights of the pricing proposal include:

• First-Class letters (1 oz.) remain unchanged at 44 cents,
• First-Class letter additional ounces increase to 20 cents,
• Postcards will cost 29 cents,
• Letters to Canada or Mexico (1 oz.) increase to 80 cents, and
• Letters to other international destinations will remain unchanged at 98 cents.

“While changing prices is always a difficult decision, we have made every effort to keep the impact minimal for consumers and customers doing business with us at retail lobbies,” said Postmaster General Patrick R. Donahoe. “We will continue to balance our business needs against the needs of our customers.”

The overall average increase across all mailing services is capped by law at 1.7 percent—at or below the rate of inflation as measured by the Consumer Price Index—although actual percentage price increases for various products and services will vary.

Prices will change for other mailing services, including Standard Mail, Periodicals, Package Services and Extra Services. Larger volume business mailers will see price increases in a variety of categories. Today’s announcement does not affect Express Mail and Priority Mail prices.

Summary of Percentage Changes by Product Category

First-Class Mail
Single-piece Letters & Cards — 0.5 percent
Flats — 5.3 percent
Parcels — 3.8 percent
Presort Letters & Cards — 1.8 percent
International (Outbound and Inbound) — 4.0 percent

Standard Mail
Letters — 1.8 percent
Flats — 0.8 percent
Carrier Route Letters, Flats, and Parcels — 1.4 percent
High Density / Saturation Letters — 0.6 percent
High Density / Saturation Flats and Parcels — 0.4 percent
Parcels (NFM’s / Parcels) — 11.3 percent

Periodicals
Outside County — 1.8 percent
Inside County — 1.1 percent

The proposed price changes are expected to generate $340 million for the balance of the fiscal year and $720 million if implemented for a 12-month period.

POSTNET Update

Regarding POSTNET, “we heard concerns that we were moving too fast on discontinuing POSTNET coding, and we will continue to offer the automation prices for mail with POSTNET barcodes beyond May 2011,” Donahoe said.

Donahoe emphasized the value of the Intelligent Mail barcode (IMb) to mailers and reiterating the Postal Service commitment to implementing the IMb. To date, more than 41 billion pieces of mail have been processed using the IMb.

Recognizing ongoing industry concerns with challenges associated with implementing the IMb, Donahoe announced that mailers can continue to use POSTNET barcodes to qualify for automation discounts. The POSTNET code was to sunset this May to enable broad adoption and use of the IMb. There will be no Full Service Address Change Service (ACS) charges.

In July 2010, the Postal Service filed an exigent price proposal that was rejected by the Postal Regulatory Commission in September. The Postal Service filed an appeal of that decision with the United States Court of Appeals for the District of Columbia Circuit in November and awaits a decision.

Faced with decreased mail volume traced to the recession and increased use of the Internet, the Postal Service continues to face a daunting financial crisis. Increasing prices is one of a series of solutions the Postal Service proposed in March 2010 to address the crisis. Other actions outlined in the March plan included changes to delivery frequency, restructuring prepayments of future retiree health benefits, creating a more flexible workforce and expanding access to products and services to places more convenient to customers. In December, Donahoe began a reorganization of all administrative and managerial functions as part of his vision to operate “leaner, faster and smarter.”

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

About USPS
A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 150 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 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $67 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 29th in the 2010 Fortune 500. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency six consecutive years and the sixth Most Trusted Business in the nation by the Ponemon Institute.

Source: Press release.

 

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