Sep. 25, 2013 at 11:05 AM ET
The United States Postal Service said Wednesday that it has proposed increasing the price of first-class mail to 49 cents from 46 cents, beginning in January, to help raise revenues for the cash-strapped service.
The USPS said the new prices would take effect on Jan. 26, 2014. The increase must be approved by the independent Postal Regulatory Commission. Highlights of the proposed hikes include:
The USPS Board of Governors Chairman Mickey Barnett, in a letter to customers, said the Postal Service was seeking the price changes because of its "precarious financial condition" and because of the uncertainty surrounding postal reform legislation.
“Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges,” said Barnett in the letter.
The USPS last increased prices for a first-class stamp by a penny in January of this year. At the time, the USPS cited losses of about $25 million per day amid declining mail volume as more people use email and social media.
Emphasizing the Postal Service's dire straits, the proposed increase is well above the typical annual hike tied to the Consumer Price Index, which rose 0.1 percent in August on a seasonally adjusted basis, and 1.5 percent over the 12 months to August, before seasonal adjustment.
The USPS, which receives no tax dollars for operating expenses, said it had a net loss of $15.9 billion last fiscal year and expects a loss of about $6 billion in the current fiscal year. The USPS is funded by the sale of postage, products and services.
Even as it seeks another price increase, the USPS is studying whether stamps have any future at all. It has hired a futurist, Faith Popcorn's BrainReserve, and is paying the group $565,769 to examine ways to stem the decline in stamp use, according to documents acquired by Federal Times, which provides news for federal managers.
Reuters contributed to this report.