In yet another attempt to stanch the flow of red ink, the US Postal Service plans to increase first class stamp prices from $0.44 to $0.45 on January 22nd, 2012. This is the first such increase in two years, and it’s expected to generate $888M in revenue.
Unfortunately, that’s just a drop in the bucket relative to the losses they’ve experienced — $8.5B in 2010, and $10B in fiscal year that ended last month — but it’s a start, I guess…
Sharp-eyed readers will note that they actually proposed an increase from $0.44 to $0.46 that would’ve gone into effect earlier this year, but that price hike was apparently never approved. The current $0.01 increase is the largest that they can enact, as such increases are pegged to the Consumer Price Index.
At the same time, the Postal Service is pushing Congress to enact reforms that would allow them to end Saturday deliveries, close locations, and raise postage prices at a rate higher than inflation. Until these things happen, I can’t see the USPS being able to balance their books. But even if these things happen, it will be an uphill battle as demand for mail service declines.
One bit of good news is that all stamps being printed are now “forever” stamps, so you won’t have to worry about those pesky little one or two cent stamps to round up your old stamps to the new rate.
Other changes include postcards going up from $0.29 to $0.32, letters to Canada and Mexico going up from $0.80 to $0.85, and letters to other international destinations increasing from $0.98 to to $1.05. Apparently these other rates aren’t pegged to inflation, as they all exceed the 2.1% CPI cap.