Postal Service rate increase planned for June

Published 12:00 am Friday, March 29, 2002

BNI Newswire

First-class stamps will go up yet again in three months – this time up 3 cents, to 37 cents – as the U.S. Postal Services continues to struggle to pay for the aftermath of last year’s Sept. 11 attack and anthrax scare.

The overall 7.7 percent increase, which coincided with a 7.7 percent increase for first-class stamps, was part of an unusual agreement that speeded up the process for increasing rates.

Sign up for our daily email newsletter

Get the latest news sent to your inbox

"This is perhaps the most unique of all the rate cases considered by the commission since its inception in 1970," said George Omas, the chairman of the independent Postal Rate Commission (, which approved the increases lst week. "I cannot overemphasize how extraordinary today’s decision is." Among the increases, postage for first-class letters will go up 7.7 percent; first-class cards, 9.7 percent; priority mail, 13.5 percent; express mail, 9.4 percent and periodicals, 10 percent.

The commission said it will increase rates as early as June 30 as part of an agreement among various parties, including employees, competitors and consumer groups. However, the Postal Service also agreed to delay any additional request for increases until 2003.

"This is the first time a postal rate case has been resolved through settlement. Normally, the numerous conflicting interests engage in complex litigation to determine whether rate increases are justified," the commission stated in a release.

However, the costs the Postal Service has incurred since Sept. 11 led the commission to suggest all the various sides come to an agreement to quickly start paying for the sudden expenses.

Federal law requires the Postal Service to break even from operations.

It is expected that next year the service will need almost $75 billion in postage revenue.

Omas said, "This decision will allow the Postal Service an immediate influx of revenue, while holding rate increases to a reasonable percentage for postal customers" Omas said. He stressed the increases should provide "breathing room the service, and those businesses that rely on it, need to successfully meet recent challenges." According to the Associated Press, the ailing economy led to the Postal Service to lose $1.68 billion last year. The service is predicting a $1.35 billion loss this year after freezing new construction and cutting 12,000 jobs.