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.”

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Jan 25, 2013 5:55PM
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 5:48PM

Volume is down 50% since 2002 and they think reducing the amount of employees only 24% is going to help. Maybe some business 101 classes would help the fools at the USPS. Let them go bankrupt then they won't be bound to ridiculous union pensions and retirement packages.

Jan 25, 2013 5:40PM
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 5:28PM
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 5:12PM

Seems to me,  The bill collectors need the post office more than I do.


Jan 25, 2013 5:11PM
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 5:11PM
Our fat, lazy, slo-mo Congress has to repeal that insane mandate.
Jan 25, 2013 5:10PM
Low wages = Low national birthrates that age Americans.

Conservatives here are advocating for wage-busting....

Jan 25, 2013 5:09PM
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 5:07PM
Republicans and Bush tried to kill the entire US Post Office by requiring it to fund its health care for the next 75 years. Why? The legislation was intended to BANKRUPT the Post Office into privatization like FedEX or UPS. So that you pay at least $10 to mail each small letter.
How privitization kills us..
Privatization is a prescription for national suicide.
Privitized Gasoline in America: $3-$5 a gallon.

NATIONALIZED/Socialized VENEZUALAN gasoline: 25 CENTS per gallon at the pump IN US DOLLARS.

Privitization is meant to kill the middle class and grow the wealth divide to favor the rich and impoverish the poor.

Jan 25, 2013 4:54PM
One of the best services we have. Go post office.
Jan 25, 2013 4:54PM
How about a cut in those outrageous salaries and benefits
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