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Commission Denies Postage Rate Hike Request by Post Office

News alert: The United States Post Office is hemorrhaging money.

It’s estimated that the USPS will lose a staggering $7 billion in 2010 after losing nearly $4 billion last year. If you’re wondering why you get so much junk mail, it’s because “business mail” is one of the few profitable parts of the existing mail volume. According to Postmaster General John E. Potter, 90% of the revenue comes from business mail. Media mail, which I’m a big fan of, is unprofitable. Magazines are unprofitable.

When the Postal Regulatory Commission decided last week that the Post Office couldn’t raise the price of postage, I thought it was a great idea. This forces the USPS to address it’s structural problems… unfortunately everything they do requires Congressional approval, which takes forever. The USPS had requested an increase of 5.6% (averaged across all mailing methods). Normally, rate hikes are capped at inflation but with the recession, retiree benefits, and other demands, they are permitted to request an increase.

Postal Service denied rate hike [3] [CNN Money]