USPS proposes rate increases for 2012
The U.S. Postal Service (USPS) seeks to raise shipping service rates by 4.6%, the company said in a Nov. 22 statement. Priority Mail prices will increase on average 3.1%, Express Mail prices will increase 3.3% and First-Class Package Service prices will increase 3.7%
Price changes will go into effect on Jan. 22 after a Postal Regulatory Commission Review approves the changes. Flat rates will also be enacted for shipments up to 70 pounds for domestic overnight delivery.
Another proposed change is the “Package Intercept” initiative for commercial mailers, which enables businesses to intercept a package for $10.95 plus Priority Mail postage. The shipment can be returned to sender, held for pick up at a Post Office, or redirected to an alternate address, according to the statement.Under the changes, consumers will be given a 6.8% discount for Priority Mail when payment is made online and on other authorized postage payment methods, the statement said.
The USPS closed the 2011 fiscal year with a $5.1 billion net loss, the government agency said earlier in the month. Last fiscal year, USPS posted an $8.5 billion net loss, the largest loss in its history. Losses would have exceeded roughly $10.6 billion had Congress not postponed the agency's congressionally mandated $5.5 billion payment into its retiree health fund.
Revenue from mailing services dropped by 3% to $56.7 billion during the fiscal year, while revenue from shipping services rose by 6% to $9 billion.
A postal reform bill was introduced in the U.S. Senate on Sept. 23, seeking to help the agency with the establishment of two control boards that would oversee a receivership for the USPS if it defaults on any of its government payments and to prevent politics from influencing plans to reduce the USPS processing infrastructure.
Separately, the USPS has hired New York-based investment banker Evercore Partners to assist in reducing annual USPS expenses by $20 billion by 2015, according to reports.
A USPS representative could not be immediately reached for comment.