USPS to Raise Stamp Prices in July Despite Declining Mail Volume
Keep US Posted — a nonprofit advocacy group of consumers, nonprofits, newspapers, greeting card publishers, magazines, catalogs and small businesses — calls on the Postal Regulatory Commission to reject the U.S. Postal Service’s proposal, announced today, for the U.S. Postal Service (USPS) to hike stamps yet another 5 cents this July. Keep US Posted also calls on Congress to take a deeper look at the Delivering for America plan (which outlines the twice-per-year increases), yet has not yielded the financial results it promised.
If approved by the Postal Regulatory Commission, stamp prices and mailing rates will go up across the board among all Market Dominant mail products, eclipsing the rate of inflation. Rates for First Class Mail, for example, will increase by nearly 7.8%. Each proposed increase is priced well above inflation of 1.622%. If approved by the Postal Regulatory Commission, the cost of a single stamp will rise from 68 to 73 cents — nearly 7.4 percent.
“The USPS consistently blames frequent postage hikes on inflation, but inflation is just a talking point, when rate increases are consistently far and above the Consumer Price Index,” said Kevin Yoder, former Republican Congressman from Kansas and Executive Director of Keep US Posted. “Across the board, the proposed July price increases hover at an average of 6.53% above inflation, which is 1.622%.”
Yoder continued, “Price hikes are driving disastrous declines in mail volume, which is still the biggest money-maker for the USPS. Fueled by mail volume losses of more than 9 percent, USPS posted a $6.5 billion loss for the fiscal year 2023 — the same year it was projected to break even under Postmaster General DeJoy’s Delivering for America plan. And buckle up for more losses if the USPS continues down this route, as the Board of Governors anticipates a $6.3 billion loss in 2024. It’s time for the Postal Regulatory Commission to hit the brakes on price increases — and for Congress to take a hard look at the numbers and how they affect the financial solvency of the U.S. Postal Service.”
A report by NDP Analytics released in March and commissioned by the Greeting Card Association and the Association for Postal Commerce (PostCom), found that the USPS is basing stamp hikes on a demand model which underestimates the elasticities (or price sensitivity) of its consumers —relying too heavily on historical data, among other issues. The report indicates that rate increases are driving the Postal Service’s economic forecasting, when it should be the other way around. In part, the report states, “If rate increases continue to proceed at this frequency and magnitude without critical review, it risks plummeting volume further and exacerbating USPS's financial challenges.”
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