Beleaguered post office may raise stamp prices
WASHINGTON — It may be time to stock up on Forever stamps.
Regulators appear likely to accept the financially beleaguered Postal Service’s request for more freedom to raise the price of mailing letters. It would be the biggest change in the Postal Service’s pricing system in nearly a half-century, allowing stamp prices to rise beyond the rate of inflation.
After a 10-year review, the Postal Regulatory Commission could make its decision next month. It might limit how high prices could go, but the cost of a first-class stamp, now 49 cents, could jump. It’s not known how much.
Financial analysts praise the plan, but it has raised the ire of the mailorder industry, which could pay millions more for sending items like prescription drugs and magazines and pass the costs onto consumers.
The Postal Service is trying to stay financially afloat as it seeks to invest billions in new delivery trucks to get packages more nimbly to American homes.
An independent agency of government, the Postal Service has lost money for 10 consecutive years. While online shopping has led to years of double-digit growth in its package-delivery business, it hasn’t offset declines in first-class mail. Overall mail volume, which makes up more than two-thirds of postal revenue, dropped 27 percent over the last decade as people rely more on email and online bill payments.
Congress’ failure to address the Postal Service’s underlying financial woes, such as onerous requirements to prefund retiree health benefits, has left the commission more likely to embrace the request for more pricing freedom. The Postal Service has ruled out closing post offices and ending Saturday delivery to reduce costs at the 242-year-old Postal Service, which generates $71 billion in annual revenue.
The decision comes as Internet sales continue to flourish, led by Amazon, spurring consumer demand for ever-faster and cheaper delivery. Forty percent of the e-commerce giant’s packages are delivered by the Postal Service, compared to 20 to 25 percent by United Parcel Service and 15 to 20 percent for FedEx, thanks to lower package delivery rates the Postal Service can offer by tapping into a network that already delivers to every U.S. household six days a week.