Mailing a letter to cost a penny more next year

2012-10-12T03:00:00Z 2012-10-12T05:21:50Z Mailing a letter to cost a penny more next yearThe Associated Press The Associated Press
October 12, 2012 3:00 am  • 

WASHINGTON (AP) — It'll cost another penny to mail a letter next year. The cash-strapped U.S. Postal Service said Thursday that it will raise postage rates on Jan. 27, including a 1-cent increase in the cost of first-class mail to 46 cents.

 It also will introduce a new global “forever” stamp, allowing customers to mail first-class letters anywhere in the world for one set price of $1.10. Currently, the prices vary depending on the international destination, with letters to Canada and Mexico costing 85 cents.

Under the law, the post office cannot raise stamp prices more than the rate of inflation, or 2.6 percent, unless it gets special permission. The post office, which expects to lose a record $15 billion this year, has asked Congress to give it new authority to raise prices by 5 cents, but lawmakers have failed to act.  

   The mail agency also will increase rates on its shipping services, such as priority mail, by an average of 4 percent.  

   The post office, which is struggling with debt and low cash flow, said the rate hikes were partly aimed at bringing in new revenue while maintaining its pricing advantage in the shipping business. Private companies such as UPS and FedEx, which offer similar shipping services, regularly adjust their prices.  

   The post office lost $5.1 billion in fiscal 2011, mostly due to a 5.8 percent decline in revenue for first-class mail. Financial results are expected to be even worse when final figures for fiscal 2012 are released next month. Earlier this year, it was forced to default on two payments due to the Treasury totaling $11.1 billion for future retiree health benefits because it lacked sufficient cash reserves.  

   While the Postal Service has said it will continue seeking ways to cut costs, Postmaster General Patrick Donahoe has made clear that the agency has little left it can do to bring in significant new revenue. After months of congressional delay, he said it's now up to lawmakers to pass a postal fix when they return to Washington after the November elections.  

   The latest rate increase, for instance, will make only a small dent in the Postal Service's losses, caused by the economic downturn, movement of mail to the Internet and a congressional requirement that the mail agency fund future retiree medical benefits years in advance. Earlier this year, the mail agency floated a proposal to Congress aimed at increasing stamp prices to 50 cents as a way to generate $1 billion in new revenue.  

   The Postal Service has also asked Congress to allow it reduce mail delivery from six to five days a week and reduce its annual $5 billion payment for the future retiree health benefits.  

   The current 45-cent rate for first-class mail in the U.S. has been in effect since January. Since 2006, the Postal Service has now increased the price of the stamp five times, from 39 cents to 46 cents.  

   Because stamps are now being issued as forever stamps, they will remain good for first-class postage. But buying new forever stamps will cost more when the prices go up.  

   While the price for the first ounce of a first-class letter will rise to 46 cents, the cost for each additional ounce will remain at the current 20 cents.  

   Other price increases:  

   —Postcards will go up one penny to 33 cents.  

   —Priority mail, small box, $5.80; medium box, $12.35; large box, $16.85.  

   —Priority mail, regular envelope, $5.60; legal envelope, $5.75; padded envelope, $5.95.  

   —Delivery confirmation will be free on packages, including priority mail and parcel post, rather than being an extra charge.  

   The Postal Service, an independent agency of government, does not receive tax money for its day-to-day operation but is subject to congressional control. 

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(2) Comments

  1. senor citizen
    Report Abuse
    senor citizen - October 12, 2012 12:47 pm
    I filled out a stop service form for a vacation about 2 1/2 years ago and when I returned home my mail box was full and had a form to pick up more mail at the post office. I picked up my mail and filled out a start delivery form and I didn't receive any mail for over a week. Of course they had stopped delivery instead. So I went back to the post office and filled another form to start my mail. I had copied the start and stop requests and double checked. They had messed up rather than I. I did not complain as I felt they were incapable of understanding and just plain didn't care.
  2. CGE
    Report Abuse
    CGE - October 12, 2012 8:47 am
    $15B negative budget and they raise stamps .01
    They are setup for failure. They need to double the price of stamps. At under $1 to send a letter across the country in just a few days that is still a deal. That still probably wouldn't cover the costs but they need to start doing something drastic and cutting services is not the answer to making more money.
    Also take away the deals for junkmail (advertisements, political jargon, coupons, etc.)
    It would be great to keep the PO in business so sitting at a 2.6% increase is not going to solve this problem.
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