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