U.S. Postal Service to Hike Rates in April

U.S. Postal Service to Hike Rates in April

David Kiley
Walletpop.com
Jan. 14, 2011

The U.S. Postal Service announced plans to hike postage rates on several different types of mail in April, but the cost of sending Mother's Day cards in May will stay the same.

The postal service said the cost of a stamp for a basic letter will remain 44 cents, but the price to send larger envelopes, periodicals, parcels, international mail, advertisements and postcards will go up on April 17.

"While changing prices is always a difficult decision, we have made every effort to keep the impact minimal for consumers and customers doing business with us at retail lobbies," Postmaster General Patrick R. Donahoe said in a statement.

Despite cutting more than 100,000 jobs and other services in recent years, the U.S. Postal Service continues to bleed cash.

Last year, it recorded losses of $8.5 billion. The USPS does not receive tax dollars and has been hurt by the growing use of email and the Internet for correspondence and other services. Netflix, which helped boost business for awhile, has also become a declining source of revenue as users begin to stream movies and TV shows over their computers rather than wait for the company's trademark red envelopes to arrive in their mailboxes.

The Postal Service is allowed to raise rates as long as the increase doesn't exceed the inflation rate of 1.7%. Last summer, it sought an increase that would have exceeded inflation, citing the unusual business conditions of the recession but the proposed hike was rejected by the independent Postal Regulatory Commission.

Here's a breakdown of the U.S. Postal Service's announcement:

• 
  For larger envelopes, the cost of the first ounce remains at 44 cents, but the cost of each additional ounce will increase from 17 cents to 20 cents.
  
• 
  Rates on postcards will increase by a penny to 29 cents.
  
• 
  Letters to Canada or Mexico will increase to 80 cents, from 75 cents and 79 cents respectively.
  
• 
  Letters to other international destinations will remain unchanged at 98 cents.
  
• 
  Express Mail and Priority Mail prices will not be affected.
  
• 
  There will be a variety of price increases for other mailing services, including advertising mail, periodicals and packages. Details can be found here.
  

The Postal Service says it hopes the new rates will raise $340 million for the remainder of the fiscal year, which ends September 30, and $720 million over the course of a 12-month period.