USPS Raising Prices, First Class To 58 Cents

As reported by the NY Post

"The U.S. Postal Service said on Friday it plans to raise the price of a first-class postage stamp to 58 cents, from 55 cents, to offset falling revenues as volumes drop.

In the past 10 years, mail volume has sunk 28%, USPS said in a statement, and is continuing to fall.

Prices for postcards, international letters and other services will increase as well, effective Aug. 29."
*** Moved by Staff to a more appropriate forum. ***

First class mail volume last year was 52.6 billion pieces and dropping about 2 billion per year which is about what it was in 1976. The first class rate was 13 cents.

13 cents in 1976 is the same as 61 cents today (when accounting for inflation); so they have not even kept up with inflation.

In my opinion the first class cost in the US ought to be at least $1.00 which would still be almost 35 cents lower than the world average for a first class letter.
Don

The GB first class rate is currently 85p (up 9p from last year), although second class (66p) posted early often arrives the next day. The US rate seems very reasonable to me.

Even with the price increase, the U.S. first class rate will be roughly the same as the postcard rate in Japan (¥63, currently a little over US $0.57). It costs ¥84 (about US $0.76) to mail a standard-sized first class letter in Japan.

"13 cents in 1976 is the same as 61 cents today (when accounting for inflation); so they have not even kept up with inflation"

Whether this is reasonable or not depends on whether there have been any improvements in efficiency or not or whether their labor costs have been lower or exceeded inflation.

The USPS is losing gobs of cash and every time efficiencies are mentioned, service cuts are proposed or Congress is asked for relief from some of the funding requirements (think prefunding pensions)they have instituted politics and unions kill it all and it starts all over again.

U.S. mail prices have always been a stone-cold drop-dead bargain, as far as I'm concerned And I think that's been intentional. After the famous first two stamps, a 5c and a 10c stamp designed for shorter and longer distance mail, the trend has consistently been toward having the lowest mailing rates possible. The postal service (formerly the Post Office Dep't) was supposed to provide a way for people to communicate over long distance, over thousands of miles in fact, as cheaply as possible, something many countries did not have to deal with to such an extent. Telegrams were very expensive. Long distance phone calls were also expensive later. But throughout the first half of the 20th century, you could send a first-class letter for 2c, 3c,4c, and so on, across the continent. Then the 3c rate lasted from the 1930s to the late 1950s, a very long time to maintain a very low rate. Three cents back then is about equivalent to 30c today! That's pretty inexpensive for carrying a letter from New York to San Francisco. Then in the 1960s, it was 4c and 5c and so on. No one was making a lot of money off these prices.

Besides letters, invoices, paying bills, and so on, cheap mail services allowed shipping of books, magazines, and newspapers ("book rate") very inexpensively to spread knowledge and encourage education which were good for the country. Farmers could ship live chicks through the postal service cheaply or seed catalogs and other farm essentials. You could mail almost anything. The purpose was to connect the country over long distances. The size of the country played a role in this. Large nations had an historical tendency to split apart, and our leaders saw cheap mail costs as one way to keep us united the same way long-distance highways did later. RFD mail delivery was a new innovation that delivered mail into distant rural areas at no additional cost. It helped keep farmers farming.

For these reasons we've always priced mail delivery at bargain basement prices with little attempt to balance the books. Profit was never the purpose of the Post Office Department or the postal service. Does the military have to balance its books by making a profit? Do the national parks have to earn a profit? Lots of areas of government lose money because making money is not their purpose. Their purpose is providing a valuable service to the people of the country. Government (aka "public") schools are a money loser, but their benefits vastly outweigh their costs. Mail was seen the same way. So I don't think the postal service has a mindset about making a profit. Maybe it should, though, today in order to pay for better mail service. If there were no mail service, what would most of be willing to pay to deliver a box or a letter from coast to coast? $20? $30? The Pony Express first charged $5.00 to carry a letter just halfway across the country with the rate falling to about $1.00 later. That initial rate was about the same as $140 today. That's what some people were willing to pay back then. I'd pay 60c without batting an eye. In fact, I'd pay 75c or even $1.00 if that was the first class rate. Half the cost of a candy bar to ship your letter 3,000 miles? Seems reasonable to me.

Thank you for the history lesson Drew M and reminding us of the role the postal service has played in tying a large and diverse country together as well as permitting the country to expand in the first place. It was no accident that the post office department was the largest federal department from the governments inception emphasizing George Washington's desire to weld all of the citizens to the new government, even those served by tiny 4th class post offices in the same way that the original US Marshals were generally members of the community they served and the familiar glue between the new Justice system and the citizens it served. In a new country born out of suspicion of federal authority this was no mean trick.

Drew - Lots to unpack there. A few quick thoughts on the fly.

Do not understand the military/profit thing. Price on freedom and security = ?

Not so sure US public schools benefits always outweigh costs given our World ranking in math and science.

The history lesson wise nice. Lots has changed. Email and so on.

Gotta run.

This Memorial Day remember those that have fallen. Every day for that matter.

As far as the Post Office losing/making money there are lots of SCF topics that have delved into this subject. A search will produce much of interest.

Since I use older stamps, that seem to accumulate faster than I mail letters, it's not like I'm paying 55 cents now. More like 20 cents or less.

USPS costs and pricing is so darned complex, with an immense number of conflicting and overlapping issues. Add to the above issues that DrewM mentions: Union contracts, UPS/FedEx last-mile delivery, rural delivery obligations, China subsidies, and government meddling, amongst many others.

IMO the USPS should not be expected to be profitable under the current requirements, limitations, and burdens. IMO Congress needs to either fully fund it or fully privatize it and get out of the way. This middle ground will never succeed.

For domestic rate first class letter mail, Canadians pay 92 cents for each "Permanent" stamp when buying in booklet form or $1.00 when purchasing only one single stamp from a coil roll as a single use stamp.
All provinces then add their provincial sales tax plus 5% federal sales tax to the selling price.
Provincal sales taxes vary by province. Alberta does not have a provincial sales tax.
In Ontario, the Harmonized Sales Tax (HST) rate is 13% (8% provincial and 5% federal), so a 92 cent stamp costs $1.04 and a $1.00 stamp costs $1.13.
Much more than a USA "Forever" domestic first class letter mail stamp, but Canada is a larger country in land mass than the USA and has the same operational issues

The reason the USPS issued "Forever" stamps is because the mail takes FOREVER to get to its destination.

Mark.

Thx for the postal history insight.

Jim

At least the proposed rate will make it convenient to use 29c stamps

I think the first class rate should be at least $1 as well. IMO, the USPS should slow or cap rate increases on package services, in order to remain competitive with private carriers and to do this, the USPS should consider raising the price of the first class rate to at least $1 in order to provide low package rates.


Other than for greeting cards and correspondence that cannot be conducted electronically, there is no need for the average person to use first class letter mail. The future as far as usage and revenue is in packages. Like they have done for decades with the first class 1oz letter rate, by keeping it low, they should transition to doing the same with packages, since that is the future.

Most customers would favor this business model and I don't think people mailing greeting cards would mind paying $1 to mail one. They are already cognizant of the fact that an electronic greeting card costs $0 and they voluntarily choose to buy a greeting card plus postage.