US Postal Service Plans New Rate Increase

12 September 2001

The board of governors at the US Postal Service yesterday unveiled plans to raise postage charges, among them the biggest hike in the cost of first-class mail for six years.

The board wants to raise the price of a first class stamp by three cents (8.2%) to 37 cents. Also planned are price increases of 8.9% for packages, 7.3% for standard mail (including advertising circulars), 10% for periodicals, 13.5% for priority mail and 9.7% for express mail.

If approved by the Postal Rate Commission, the price rises – which board chairman Robert F Rider defended as necessary “to maintain the universal delivery system” – will probably be implemented next fall.

Although slightly lower than the 10% to 15% feared by marketing and media companies, the planned increases drew a stinging response from the Direct Marketing Association, which warned that mailers could seek alternative delivery options if prices rose in the run-up to the 2002 holiday period.

“With another greater-than-inflation-sized increase, the Postal Service is writing a how-to book on driving customers away,” fumed the DMA’s president-ceo Robert Wientzen. “In this slowed economy, instead of looking at ways to pass along increases to its customers, the Postal Service needs to focus on cost cutting as a way to remain viable while maintaining its customer base.”

News source: Advertising Age - Daily Deadline