The United States Postal Service has proposed the largest jump in price for its 1-oz. letter stamps in the agency’s history. The board of governors suggested that the price of a stamp be increased from 50 cents to a record 55 cents. While the measure will still need to be approved and accepted by the Postal Regulatory Commission, the board of governors believes that the new rates will not only increase much needed revenue but will make sure that the Postal Service remains competitive.
Other postal rates for such services as catalogs, magazines, and other types of letters are not set by the board of governors but are dependent on consumer prices. This year it is estimated that price increases for these services will rise around 2.5 percent.
For packages, the price is related to market rates. The Postal Service is planning on raising Priority Mail prices by about 5.9 percent. For example, a small flat-rate box, which now sells for $7.20, will cost $7.90 next year.
These increases in prices are partly due to the decline of first class mail revenue. In the 2015 fiscal year, first class mail brought in $28.4 billion, but in 2017, the total was only $25.6 billion. The Postal Service also must fund postal employees retiree health benefits, which also cost the agency and have added to their losses.
One area where the Postal Service is thriving is in their package services. Due to the rise of online shopping, in 2017, the Postal Service brought in $19.5 billion, which was an increase from 2015 when they brought in $15 billion. However, all those package services haven’t been able to offset the deficit that the Postal Service operates under.
President Donald Trump has routinely criticized the Postal Service, specifically their package delivery contract with Amazon, suggesting that Amazon is taking advantage of the agency. Although the terms of the contract are private, the Postal Service says that the make a profit off of the arrangement. The Trump administration has proposed privatizing the agency, which has elicited protests from postal unions.
Trump also ordered a review of the agency back in April. This task force, created by the Treasury Department, has finished their review, but the results have not been made public, nor does the Postal Service know what the review says. Reports suggest that the finished review is being held until after the mid-terms elections in November.