Postal Service Rate Hike Expected In January

The Postal Service is expected to raise rates starting in January.

According to Fox 59, the Postal Service wants to increase the cost of mailing a letter to 49 cents and the price of sending a postcard to 34 cents.

The proposal still needs to be approved by the Postal Regulatory Commission. If the proposal is approved, the Postal Service rate hikes will raise about $2 billion.

The Postal Service Board of Governors Chairman Mickey Barnett Barnett said: “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.”

Rep. Darrell Issa, R-Calif., the chairman of the House Oversight and Government Reform Committee, said that the Postal Service rate hike is only a short term solution.

Issa said: “If implemented, (it) may ease the financial burden on USPS in the very near term. But this rate hike and the ones sure to follow will only push more and more private sector customers to stop using the mail altogether… The rate increase poses a direct threat to the 8 million private sector jobs that are part of the mailing industry as businesses shift from paper-based to electronic communication and mailers are priced out of business.”

CNN reports that the agency lost $740 million in the three months prior to July 1. That’s actually an optimistic figure. During the same period last year, the agency lost $5.2 billion. In the current fiscal year, the agency has lost $3.9 billion.

Total mail volume has also been dropping. The Postal Service delivered 37.9 billion pieces of mail in April, May and June this year. The agency delivered 38.3 billion pieces of mail during the same period last year.