How higher postal prices affect you

Even people who don't use the mail much might feel the impact of increased shipping costs for companies.

By Jason Notte Oct 12, 2012 5:01PM

Image: Mailbox (Corbis)The Postal Service is boosting stamp prices again, and no amount of texting, instant messaging, online bill paying or e-mailing will spare you the results.


Starting Jan. 27, the price of a first-class stamp goes up by a penny to 46 cents, and the price to mail a postcard rises by the same amount to 33 cents. International letters will now cost $1.10 to send, up from 85 cents to Canada and Mexico and $1.05 to other destinations.


But even a public that has switched from the printed word to Skype, FaceTime and other technologies should be concerned about the 4% overall boost in mailing and shipping prices and 6.3% hike in priority mail fees. Why? One simple reason: Overhead.


If consumers still have Netlix (NFLX) discs delivered, despite that company's best efforts to shake DVD customers loose, or turn their homes into mazes of Amazon (AMZN) packages around the holiday season, the Postal Service's price increases could take a toll. Those hikes in shipping rates cut into companies' bottom lines. That cost inevitably gets passed on to the consumer, be it through increased shipping rates, increased fees or changes to shipping policy.


Netflix, already trying to reduce its dependence on the USPS by luring customers to its digital streaming service, still has more than 10 million DVD-by-mail customers. Amazon, meanwhile, has attempted to cut the Postal Service out of its price model by using third-party logistics firms like same-day shipping service LaserShip to complete orders. Online consumer reaction to that service has been decidedly mixed.


Now Wal-Mart (WMT) is getting into the mix with plans for its own Wal-Mart To Go same-day delivery service that relies largely on shipments from its existing retail facilities and could bypass the Postal Service altogether if the price isn't right. USPS could use the business after a 2006 law drained its resources by ordering the Postal Service to put money aside for future retiree benefits. It has since borrowed $12 billion from Congress just to stay afloat and started closing mail processing plants to cut costs.


Americans may have less coming in and out of their mailboxes than they did a decade or two ago, but what's there requires the Postal Service to make it work. Threats last year to increase delivery times for First Class mail to two to three days sent ripples through Netflix's share price, while calls to cut $20 billion from USPS operating costs by 2015 were heard by everyone from eBay (EBAY) sellers to Zappos-addicted clotheshorses.


With Congress vowing to forego any further Postal Service assistance until after Election Day, more cuts and price hikes could be coming to a mailbox near you... even if you haven't bought a stamp or licked an envelope since the last Bush Administration.


39Comments
Oct 14, 2012 11:38AM
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The article does mention the cause of the post offices financial problems.  It buries in a paragraph the fact that Congress is making the post office prefund 75 years of future retiree medical benefits in a 10 year time period.  It would be like making you pay 30 years of future income taxes in the next 4 years.  Most of you couldn't do it.  Why would you expect the post office to be able to do it?
Oct 12, 2012 11:49PM
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We have a Congress that took time off before they even got to this item. USPS needs Congressional approval before they can move forward. Prepaying for medical, etc is a dumb idea, and adds millons of dollars to the USPS every year. USPS would also like to drop Saturday mail to save some money. In my opinion they need to close some post offices that don't bring in any money. Junk mail postal rates should go up. At voting time, when you get political mail, the person mailing the items should pay for it, and not the taxpayer.
Oct 12, 2012 9:07PM
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postal stamp................. still the cheapest thing out there!!!!!!!!!!!!!!!!!!!!!!!
Oct 13, 2012 1:40AM
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Can you imagine how much it would cost to mail a letter if they privitise the USPS? UPS and Fedex must be drooling over the prospects of taking over.Dumb move unless you own some of their stock.
Oct 15, 2012 6:05AM
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Pissed Off By The PO ....

 

The way the PO keeps raising the first class postal rate by a penny or so almost every year it is starting to become a giant pain in the ****. What the Hell, here's another totally insane idea ... Why don't they just stop dicking around and raise the rate to an even $1.00 and leave it completely unchanged for the next decade or so? This way the PO can make the money that they really seem to need to operate profitably and the public will not have to be continously aggravated with these seemingly annual little price hikes that don't solve the problem. Additionally, if we don't happen to have that fancy new $1.00 stamp handy ....we can simply glue or tape a one dollar bill straight onto the envelope and then just f o r g e t a b o u t i t ......

Peace ~

Oct 12, 2012 10:58PM
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Government junk mail and insurance junk mail should be enough to keep the postal service working and making money.  I get the most junk mail from government always wanting some sort of senseless response and always with some sort of threat and a deadline to respond by.  And, insurance is no better.  But, I think insurance and government goes hand in hand.  Government allows direct marketing from which so many companies get your name and address, and it is legal for them to buy lists.  And, isnusrand is always "affordable" no matter what the price and you are always instructed to "call today!." I get so tired of it.  Another reason I will VOTE AGAINST EVERY INCUMBENT ON MY BALLOT, local to national level.
Oct 14, 2012 7:25PM
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Yes, it's called having the consumers prop up the extravagant pay, benefits and lifestyles of a bunch of overpaid, lazy postal  bureaucrat-brain employees. Shut the operation down first thing Monday morning. Time for lazy butt postal employees to bit the bullet. Turn mail delivery into a business, where you can be fired for NOT doing your job...

Oct 12, 2012 11:55PM
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Figure out how much it costs to mail a letter - it is surely more than they currently charge since they lose billions - charge that price and stop whining.  Business 101.
Oct 15, 2012 12:52AM
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The Unions are on the ropes and about to give it up! They can't win this one and the gravy-train is OVER! Bail - out, transfer, or retire.....those that will work for crumbs will take over!
Oct 12, 2012 9:40PM
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"Smilin Joe" looks like a used-car salesman...can you imagine the postal rates if "Smilin Joe "were POTUS? $38.50 for a postcard... That's enough reason to vote Romney/Ryan ... :)
Oct 15, 2012 5:56AM
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UNIONS--OVERPAID EMPLOYEES--PRICED THEMSELVES OUT OF BUSINESS.
Oct 12, 2012 9:00PM
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Regardless of who you vote for they are all crooks so what does it matter...
Oct 15, 2012 11:59AM
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netflix doesn't offer all it's movies on instant streaming. 
Oct 13, 2012 7:19AM
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 Three years ago A person We have never known used are address to get a state I D, all solicitors took them off are address but Comcast has refused, now this year the postal service is refusing to take the Comcast mail back even though it has the Wrong name We have had alot of wrong mail and missing mail this year anyway . I finally gave up and have changed everything I can to electronic billing and electronic statements hopefully the post office can deliver more junk mail to make up for it, then they can change their name to THE UNITED STATES JUNK MAIL AND JUNK I D SPONSOR.

Oct 15, 2012 10:43AM
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Impacts of higher postal rates, are The damn unions having more power that's all.     Fire them all.
Oct 15, 2012 4:02AM
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I think they go ahaed and raise the rates well beyond the boundries that it takes for their services. And use that money elsewhere to help our country out here and there. And to help cut down the ads which they mail out all the time that wind up in the trash. I don't need to be bombarded with ads to make up my mind about products or services. I use what I use and not buying anything that I don't need. 
Oct 13, 2012 2:54AM
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Brett, Your comments are worthless opinions not facts. Do us all a favor and sell your computer. 
Oct 14, 2012 8:55PM
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One of the best deals still to be found and we ignore it. Maybe the time has passed where we keep supporting an antiquated system of entitlement. The institution will slowly die - a relic of affirmitve action at it's best. I am searching for a fiddle and some tinder to light the fire - burn baby burn!!
Oct 15, 2012 10:38AM
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The U.S. Postal Service is efficient yet inefficient.  They keep raising the price of postage as we the consumer keep looking for more ways not to use them.  It's a 'Catch 22' if there ever was one.  I'm not sure what the solution is.  Maybe to privatize them.  Get them away from the U.S. Government.  At the same time, we don't want to break them either.  Nobody can do what they do better.  I really don't think raising the price of postage every year or two is going to solve their problems.  It never has before.  I really do not believe anyone in Washington wants to seriously address this problem.  If they did it would show up in the cost we have to pay at the post office.           
Oct 12, 2012 8:18PM
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Joe Biden is a FAKE, FRAUD, LIAR and probably an ABUSER !!  Can you possibly imagine Joe Biden as President !!!???
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