Desperate for cash, Postal Service hikes stamp price

A 1-cent jump in the price of stamps comes as the USPS struggles to stop the financial bleeding.

By Bruce Kennedy Jan 25, 2013 4:15PM

Image: Mailbox (Corbis)For those of us still using snail mail, there’s another price hike coming from the U.S. Postal Service.


Starting on Sunday, and as announced last October, the Postal Service will be raising the cost of a first-class stamp by a penny, to 46 cents.


Postcard stamps also increase 1 cent to 33 cents, and letters to all international destinations will now have one set price of $1.10.


Not that these rate hikes are likely to have any significant impact on the USPS’ ongoing financial woes.


While it has seen record growth in its package delivery business, the Postal Service continues to bleed money, hobbled by what one of its press statements calls “an inflexible business model that hinders its ability to be self-sufficient.”


For fiscal 2012, the Postal Service defaulted on $11.1 billion in mandated payments to the U.S. Treasury -- which in turn contributed to a record loss of $15.9 billion.


The USPS receives no tax dollars for its operating expenses, relying on the sale of postage, products and service for funding. It’s been reducing its annual cost base by about $15 billion since 2006 and has cut its workforce by 168,000, or 24% -- while reducing hours, closing some small post offices and consolidating others.


Part of the issue is the rise of email and other more immediate forms of communication. The Postal Service’s volume of single, first-class mail has reportedly been cut in half since 2002 -- and its total mail volume is down 25% since 2006.


And the New York Times reports USPS is losing out to private shipping companies like UPS (UPS) and FedEx (FDX) on long-term shipping contracts.


There’s a petition on the White House web site, meanwhile, urging the Obama Administration to "Save the Post Office."


“The Postal Service is not a federal agency,” the petition notes. “It does not cost taxpayers a dollar. It loses money only because Congress mandates that it do so.”


The petition goes on to warn that if Congress doesn’t take action, the USPS could go bankrupt later this year -- and it urges lawmakers “to free the Post Office from its congressionally mandated obligations and allow it to raise additional revenue so that it can become self-sustaining once again.”


More on moneyNOW

206Comments
Jan 25, 2013 5:09PM
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Another example of Government Failure. They cut the Post office loose from the Federal Government Years ago but keep Government controls and it is failing just like our Government. How can you run any Business with 535 idiots at the wheel
Jan 25, 2013 5:28PM
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I blamed the government for the USPS woes until it came out last week that they gave Lance Armstrong a 30 million dollar sponsorship.  Because USPS needed the publicity?  Come on, they don't need to advertise.  Everyone know what the post office is and does. 
Jan 25, 2013 5:11PM
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How about a BIG cut in the Post Master General's pay and BONUS!!    These idiots just know how to raise prices and don't have a clue how to cut to save money.  Raising prices is easy, knowing how and what to cut, takes a brain.
Jan 25, 2013 4:54PM
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How about a cut in those outrageous salaries and benefits
Jan 25, 2013 5:11PM
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Our fat, lazy, slo-mo Congress has to repeal that insane mandate.
Jan 25, 2013 4:54PM
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One of the best services we have. Go post office.
Jan 25, 2013 6:20PM
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Congress gets I think 5 Billion from USPS annually for what?   For the privilege of doing business.  How do you say it   PAYOLA!
Jan 25, 2013 7:25PM
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The post office could easily make a profit if they didn't have to pay those ridiculous funds to the government that no other entity has to do.  It's just another fund bucket for the government to steal money from such as they do with our social security funds.   I think the majority of people out there like to receive mail.  I know I look forward to it. 

Jan 25, 2013 5:55PM
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What hurt the post office most was auto-bill pay.  They used to be guaranteed a constant flow of mail, because everyone paid their bills that way.  Not anymore.  To a certain extent email may have hurt them a little also, but not as much as online bill paying and some electronic exchange of documents for business.  They get less overnight delivery business also, since businesses use FedEx and other couriers for that too.  So it isn't just government controls, but these other issues that also have contributed.  At the same time, it's time the government allowed the postal service to find ways to keep themselves afloat - they can't do it simply by continually raising the price of stamps.
Jan 25, 2013 7:47PM
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I live out in the country and I depend on the US mail.  I also agree that if the Feds are hindering the post office from making a profit then they should stop doing it.  I thing the USPS is more important then the internet addicted think it is.
Jan 25, 2013 6:28PM
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alot of you dont know how the carriers are paid, they measure how many feet from the vehicle to the mail box, how long it takes to deliver certifiieds and registered mail..etc., they measure the package to see whether its a package or a letter, how  many miles your route is, how many businesses, curb side, and NBU's, they time when you load your vehicle, count your packages, letters, magazines, and so on and so on..a total way to pay the carriers, they need to use the civil service pay chart and to let it reflect time in service. period. the higher ups are so behind the times and have been, they used to rely postage to pay for everything, they should have seen email coming a long time ago as the computor age came about. its run by idiots, plain and simple, so dont blame your carrier, he/she is only trapped by the idiocies of management.
Jan 25, 2013 8:02PM
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You haven't seen anything yet. Wait until your beloved Obamacare hits this October. You'll get what you voted for.
Jan 25, 2013 8:10PM
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My sister just retired from the post office.  Just plain worn out.  Initially she worked in PA slipping and sliding on ice and snow.  Then she moved to FL where I lived.  The heat was so unbearable, I often wondered how she stood it day in and day out.  She was also required to lift packages up to 70 lbs.  Her route was constantly being increased.  Then she came down with shingles and said she just couldn't do the job anymore and they were unsympathetic. Shingles is extremely painful.  I told her to retire and she did.  God knows she deserves her pension, unlike some of the ones I see working in the post office buildings.
Jan 25, 2013 5:40PM
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Who else has ever had such an unrealistic mandate forced on it? And the USPS isn't even funded by the government. What gave the govnmnt the right to commit such an attack? The same people who want to privatize everything so greed capitalism can take control. They intentionally gave a mandate to break the postal service. Without this mandate and govnmnt. interference (they've been carrying since Bush) the USPS could have had a reasonable chance to come out of their difficulties in reasonable time.
Jan 25, 2013 11:23PM
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A long time ago, the congress, in thier infinite stupidity, raided the bank acccounts of the Postal Service and never paid them back. At that time ,the U.S.Postal Service was the only dept. ,under the heading U.S., that had a surplus in thier accounts, not lost on the congress, who at the time ,could not pay thier way out of the bathroom. So they "borrowed " from the service and at a later date, required the Postal Service to pay to the treasury a whopping 5Billion dollars per year, for what, some of us have been asking that for years,but lately the congress has increased that amount. These congressional shennaigans have added to the Sevices ability to compete with private sector package shipping companies, whose stock is undoubtably held by some of those in congress or thier families. Well, now, if the Postal Service goes bankrupt, who do you think is going to benefit,,,, the package shipping companies, then thier stock value increases and the stock holder makes more money,i.e... the members of congress and thier "straw buying" families.    Now, I think, a good way to start , is for congress to get out of the way and allow an institution ,of the original United States to continue thier work on a level playing field, without government interference. For once, I would like to see congress and Washington, as a whole, "practice what you preach",get out of the way and let them do what they do best, that's Deliver, something congress has not done in a very long time!

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Federal Failure is the goal, not the mistake!
Jan 25, 2013 5:12PM
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Seems to me,  The bill collectors need the post office more than I do.

 

Jan 25, 2013 7:19PM
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The government should not be involved at all. Let them compete like all other private companies.  They either survive or they go out of business.

Jan 25, 2013 7:24PM
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THE DAYS OF THE HORSE CARRIER IS GONE. BUT THE RATE YOU GET IT AT,.IS JUST AS SLOW AND ...NOT GOVERNMENT RUN BUT GOVERNMENT CONTROLLED...One point ; I know a man at out local Post Office, 20 years  in the military, retierd with full benefits

38 years old, comes  home get job with local P.O. been there 25 years, getting ready to retire from there with full benefits...Nothing worng with that, 45 years working for the Government, he's has made a good living... Now he has full medical from the military, full PX benefits, he can buy his food on base his med's on base, anything he needs on base. Then you hear this BS,  about the Post Office can't keep it's head above water. will the cost of evrything is high and going up...Proven fact some people make good calls wthen their young and some make bad ones, Look's to me he made a good one many years ago............Good for him....You can bet he don't make $175.000 to $425.000 a year for life, as those Fat A$$'s do in DC. they are the ones someone needs to kick to the street,  starting with O'Bams.

Congress has come to be A BIG JOKE/ and O'bams Admin. is nothing put a bunch of ( DERANGED CLOWN'S). The Senate will there's no words for them............

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If everyone gets as much junk mail as I do , that should be enough for the Post office to break even??

 

 

 

 

 

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