Category: 

Why Does the US Postal Service Keep Raising Their Rates?

A decline in first class mail is one of the causes of the US Postal Service raising their rates.
The US Postal Service receives no funding from the government.
Liberty Bell forever stamp.
Article Details
  • Written By: Mary McMahon
  • Edited By: Bronwyn Harris
  • Last Modified Date: 15 December 2014
  • Copyright Protected:
    2003-2014
    Conjecture Corporation
  • Print this Article
Free Widgets for your Site/Blog
A red blood cell can pass through a person's entire body in 20 seconds.  more...

December 19 ,  1998 :  President Bill Clinton was formally impeached by the House of Representatives.  more...

As many patrons of the United States (US) Postal Service have noted, the cost of stamps and other services is continually on the rise. In 2008, stamp prices rose twice in one year, causing a great deal of unrest among users of the US Postal Service, and leading to the widespread adoption of the Forever Stamp, a stamp which is guaranteed to deliver a first class letter, no matter how much the postage is.

There are a number of reasons why the US Postal Service raises rates on a regular basis, and it may come as some consolation to consumers that rate changes must be approved by the entire USPS board, in concert with the Postal Regulatory Commission. As a general rule, the USPS tries to keep rates as low as possible, and it is not allowed to raise rates any more than necessary.

Ad

The US Postal Service relies on revenue from the services it provides to fund those services, receiving no assistance from the United States government, so the cost of stamps and other services is directly linked to the cost of running the US Postal Service. Several things contribute to increasing operating costs. The first, of course, is inflation; as all Americans know, a dollar does not go as far as it used to, and inflation plays a role in the rising costs of all goods and services, not just postage. While the US Postal Service has historically tried to keep stamp prices as low as possible, ultimately inflation takes its toll.

Rising fuel costs have also contributed to a need to raise rates regularly, as it costs more to deliver the mail, and rising minimum wage requirements have increased operating costs at USPS facilities as well. The US Postal Service also prides itself on providing an excellent benefits package to employees and former employees, and this costs a great deal of money to run. Furthermore, the US Postal Service must pay for uniforms, vehicle fleets, equipment, new facilities, maintenance, and a host of other services which are all funded through stamp revenue.

Stamp rates have also risen in response to changing consumer attitudes about the post office. The use of the US Postal Service is on the decline, with many consumers using the Internet to send e-mail, pay bills, and read newspapers, and, as a result, the US Postal Service doesn't have as much revenue to draw upon as it once did. As a result, it has been forced to raise stamp prices to ensure that it continues to run smoothly, even though fewer people are using its services.

Ad

More from Wisegeek

You might also Like

Discuss this Article

anon946771
Post 7

My complaint is they are killing internet sales with their dropped international surface service and now with their double parcel, but we give you free tracking rates.

I have been dealing antique clocks for about 15 years now and have become so very disappointed in the way no one checks their changes from the government to ensure they are helping small business in these very gloomy difficult times.

The parcel select increases are ridiculous. If you check the zones, sometimes it is cheaper to ship something priority than parcel. I just purchased a model kit from New Mexico to Massachusetts. This thing could not weigh 3 pounds and it was $13 something. Nobody goes through things and see if it makes sense. They are in such a rush every January to try to get more money. Then they go on and on and how they help small businesses. The priority boxes are nice but we pay for them in the long run.

If they want to help business and help themselves with more volume, stop increasing prices and messing with services and bring back surface international for more sales and volume. I used to be able to sell someone on the West Coast a clock by asking if they weren't in a super rush and I could get it to them for 20 bucks but it would take a week with no tracking, but insured and nine times out of 10, the sale was done. Now that same clock is 45 to ship slow boat (but free tracking. Whoopie) and 65-70 priority. And the way they dropped international surface and continually cut down on priority sizes to try to get everyone to use global (arm and two legs).

It is so stupid. They have way less volume and have killed sales instead of increasing volume and having the income. Internet sales and shipping have bailed the postal system out in the era of email and paying bills electronically and now they are thanking us by killing our business.

anon931144
Post 6

I'd like to see anyone try to deliver a letter from one end of this country to the other for 44 cents. I have no idea why the rates are not just raised to $1 and get it over with, instead of the 1 cent at a time nonsense. And then they could erase the losses and get back to some good service.

If people don't like it, fine, then send it by FedEx for $18 and see how they like it.

You want to know why they don't raise the rates to $1 and be

done with it? Because the whining Republicans are so afraid that

some business might have to pay more for the junk mail they

keep sending us. Of course, we all know that the taxpayer should

subsidize every business in the US, whether it is worthless or not. So we are paying to subsidize their junk mailings, and keep the corporate welfare going full steam, and the citizens can pay for the losses by the Post Office. The sooner we run every last worthless Republican out of office, the better.

anon108560
Post 5

What I want to know is: Who is at fault for overcharging the Postal Service $75 billion? The Postal Service or (OPM) Office of Personnel Management?

anon108402
Post 4

The U.S. Postal Service has been overcharged approx. $75 billion, yes, billion by the U.S. Government(OPM) Office of Personnel Management

Should the $75 billion be returned to the Postal Service, (which is rightfully theirs) it will be used to help cover the current fiscal year deficit and beyond.

I would like to blame this fiasco on the Post Office, but they did nothing wrong. The Office of Personnel Management (OPM) actually manages the federal overnment and civil service. It (OPM) is another branch of the US government. The OPM is responsible for the Postal Service retirement funds.

OPM tells the Postal Service what amount is necessary for this funding and the Postal service pays it, which they did. Eventually, the Post Office ran an audit which discovered OPM overinflated the payments using the

wrong calculations based on projected pay and future inflation. The audit was presented to the Postal Service, Management, OPM and Congress and all agreed the $75 billion was overpayment.

It's hard to believe that one branch of the government could do this to the other, but that's exactly what took place. Now it will take Congress to return the money.

If they don't, all taxpayers will in some form or another have to cover the Post Office's current shortfall. most likely by raising postage rates again and cutting services. If or when that happens, at least we will know why. Raising rates is bad, it has a big trickle effect, a chain reaction.

Post Office charges more- customer pays more- advertisers pay more- so stores charge more for products, the trucker's delivery charges increase, and on and on. You get the picture. In the end, we all pay. Now I understand the postage rate increases for the past few years. I often wondered why they needed to do it. That $75 billion would have had the Postal Service in the black every year.

The reality here is that there never should have been increases over the past few years, and probably wouldn't have if OPM calculated things right, looks like Government bites themselves in the butt on this one!

I am surprised this is not headlines every day in the news, which makes me believe Congress will correct this overpayment, but, if they don't, we all will pay! When this money is returned, contract talks will not be an issue, not even rate increases or elimination of six-day delivery.

anon68858
Post 3

Because customers demand too much pampering. I delivered a route for years where my first 42 homes had 12 steps to their mail box and only two people had their boxes at the bottom of the steps. Hundreds of streets in this city like that --very time consuming. Sometimes walking up and down steps and long sidewalks forever without many deliveries.

Ask them to logically locate their boxes and most of the responses were, don't be so lazy. Mention snow and ice on those steps and they tell you what God put down he will take away eventually. And of course there are the more than 5,000 dog bites a year.

Poor excuses for mail boxes, some which would not hold the gas passed by a gnat. Don't even talk about closing some post offices that take in very little money and are a meeting place for the locals.

Stamps can be purchased at almost every grocery store, by mail or from your carrier. And of course there is our own management for whom they can't find enough offices to house them or find enough titles. Retired postman

anon16244
Post 2

I've always thought Americans were getting a real bargain when it comes to mailing letters and sending packages! No other country does it this inexpensively! And I had no idea that they receive nothing from the US Gov't!! Come to think of it, maybe that's why it's so cheap! It would probably cost a lot more if the government were involved somehow.

anon16233
Post 1

How can a International receiver of a Mail track His/Her parcel or shipment, when the receiver is Outside the United States? (Ex: I am Residing in Sri Lanka - Asia)

Post your comments

Post Anonymously

Login

username
password
forgot password?

Register

username
password
confirm
email