The United States Postal Service has announced price increases due to operating expenses and a lack of revenue, although some postal parcels are expected to decrease.
The increase and decrease in prices are expected to take effect Jan. 22— prices for standard 1-oz. letters will increase from 60 cents to 63 cents, domestic postcards will increase from 44 cents to 48 cents and international postcards and letters will both increase by 5 cents to $1.45.
“As operating expenses continue to rise, these price adjustments provide the Postal Service with much needed revenue to achieve the financial stability sought by its ‘Delivering for America’ 10-year plan,” read the press release attached to the announcement. “The prices of the (USPS) remain among the most affordable in the world.”
The Delivering for America 10-year plan was devised in 2021 to “transform the (USPS) from an organization in financial and operational crisis to one that is self-sustaining and high-performing.”
The Postal Service’s expenses have exceeded its revenues year after year since 2007 — only being able to stay in business by increasing its debt and missing required federal payments funding retiree pension benefits, according to the U.S. Government Accountability Office.
USPS has lost $87 billion over the past 14 fiscal years, including over $18 billion since the beginning of the pandemic. The Postal Service did receive $10 billion in COVID relief funds from the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act, but according to the GAO, the USPS business model is unsustainable, and all retiree health benefits would be depleted by 2030 if a major restructuring doesn’t take place.
“Depletion of the fund, together with USPS’ potential inability to pay its share of retiree health care premiums once they are no longer being paid from the fund, could result in some combination of reduced benefits for postal retirees, increased payments from retirees or current postal employees, higher postage rates, or payments from the federal government to fund these health care premiums,” read the GAO’s 2021 report on the USPS’ financial viability.
In March of this year, the U.S. Senate passed a major financial relief bill that would fund USPS with $50 billion over the next decade and would require retirees to enroll in a federally sponsored health insurance plan – but like the CARES Act relief, it still may not be enough for the Postal Service to stay afloat.
One of the many reasons for the decrease in revenue is because of USPS’s inability to adjust pricing to reflect inflation rates, especially to its most profitable product — first class and priority mail/packages. Prices overall for both of these categories will be increased — priority mail by 5.5% and first-class packages by 7.8%.
However, some individual domestic priority mail prices will actually decrease, most notably small flat-rate boxes ($10.40 to $10.20), regular flat-rate envelopes ($9.90 to $9.65), and padded flat-rate envelopes ($10.60 to $10.40).