Postal Rates Headed Higher -- Again
With payrolls in jeopardy, a desperate Postal Service seeks more revenue.
Come January, mailers will have to pony up more for postage. In the cards: A 2¢ hike in the price of first-class stamps -- to 46¢ each -- and up to a 5% boost in postage for magazines, catalogs and bulk mail.
The U.S. Postal Service (USPS) realizes that raising rates will accelerate the shift by businesses and other mailers to e-mail and nudge businesses to increase their targeted Web advertising efforts.
But the USPS is in more immediate straits as it continues to rack up operating deficits. It may not be able to meet its payroll next year in light of a deficit that’s likely to balloon beyond the $7 billion in red ink it expects to run this fiscal year, which ends in September.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Stopping Saturday mail service as planned will help stanch the red ink. But it will take at least a year after Saturday service is halted -- likely sometime next year -- before big savings are realized.
We expect the USPS to seek a special dispensation from the Postal Regulatory Commission in early July for what amounts to an emergency rate increase. The USPS does have the authority to unilaterally boost postage prices, but any increase cannot exceed the inflation rate in the previous 12 months, and in the current slow motion economic recovery, inflation is nearly zilch.
Look for the regulatory commission to OK the rate hikes by fall.
Business mailers will scream, claiming that the 2006 postal reform law intended for emergency rate increases to be approved only in the wake of an extraordinary event, such as a pandemic or a terrorist attack, that slammed postal revenues, and not in a recession-provoked downturn in mail usage.
“We’ve had 20 recessions since 1900 and the postal service has been looking at and planning for drops in mail volume for the past decade, so the decline now can’t be a surprise to it,” says Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association, a trade group representing companies that reach consumers by mailing promotional material.
-
Use An iPhone? You May Be Hearing From A Class-Action Lawsuit Group
A handful of suits against the iPhone maker seek to crack down on everything from app store purchases to messaging.
By Keerthi Vedantam Published
-
Capital One/Discover: What's In Their Wallet For You?
Push back on Capital One's planned merger with Discover is growing with one group of consumer advocates calling for a public hearing.
By Keerthi Vedantam Published
-
The Robots Are Coming... But Not For a While
The Kiplinger Letter There’s excitement in the tech sector over the potential of humanoid robots, but widespread adoption is likely to be years away.
By John Miley Published
-
Farmers Face Another Tough Year As Costs Continue to Climb: The Kiplinger Letter
The Kiplinger Letter Farm income is expected to decline for a second year, while costs continue to up-end farm profitability.
By Matthew Housiaux Published
-
H-1B Work Visa Rules Get a Revamp
The Kiplinger Letter H-1B visas allow employers to hire high-skilled foreign workers. Regulators have finalized new rules for this visa program following last fall's proposal.
By Matthew Housiaux Published
-
Woes Continue for Banking Sector: The Kiplinger Letter
The Kiplinger Letter Regional bank stocks were hammered recently after news of New York Community Bank’s big fourth-quarter loss.
By Rodrigo Sermeño Published
-
Are College Athletes Employees of Their Schools?: The Kiplinger Letter
The Kiplinger Letter A recent ruling has ramifications for labor relations and the unionization of student athletes.
By Sean Lengell Published
-
Salton Sea Clean Energy and Lithium Project Gets Approval: The Kiplinger Letter
The Kiplinger Letter California's Salton Sea is due to see the construction of a new lithium extraction and geothermal clean energy power plant.
By Matthew Housiaux Published
-
More Woes for Anheuser-Busch as a Strike Looms: The Kiplinger Letter
The Kiplinger Letter Drinkers of Anheuser-Busch beers may want to stock up soon. A looming strike threatens to shutter its U.S. breweries later this month.
By Sean Lengell Published
-
The Auto Industry Outlook for 2024
The Kiplinger Letter Here's what to expect in the auto industry this year. If you’re in the market for a car it won’t be quite as daunting as it was during the pandemic and after.
By David Payne Published