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USPS Considering Stamp Price Increase

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Post OfficeThe United States Postal Service proposed an increase to the current stamp price by two cents, to 46 cents. The USPS would also increase, correspondingly, the prices of all other shipping like Priority and Express mail service. All told, the increase is estimated to only generate an additional $3 billion in the next fiscal year, not even half of the estimated $7 billion deficit they are projected to run.

It’s unfortunate what’s become of the USPS as they try to get back into the black. There’s very little by way of innovation and most people hate going to the post office, like they hate going to the DMV. The lines are always long, there are never as many tellers as there are windows, and you’re always stuck behind someone who hasn’t even packed what they intend to ship.

The suggestions only hasten the demise of the USPS. Shutting off Saturday service will save them money, but you don’t get more business by offering fewer services. Increasing stamps will only shift purchasing (buying more Forever Stamps) or give people another reason to not mail something. Email is free.

The Postal Regulatory Commission oversees the Postal Service and they need to approve the latest price increase, which would be scheduled to go into effect January 2nd.

(Photo: nhoulihan)

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30 Responses to “USPS Considering Stamp Price Increase”

  1. MikeZ says:

    I thought the plan was to shut off say Tuesday mail delivery, not to close the Post office on Saturdays (or any other day for that matter). I hadn’t seen any plan on removing Post Office hours or Saturday deliveries.

    This seems like a reasonable thing for the post office todo. Daily mail delivery to every house doesn’t seem to make sense coupled with email/online billing.

    Heck I’d be fine with only getting my bills on Mondays, but that would probably drive away customers.

    • cdiver says:

      By the time this rolls out, the savings will have been consumed by the increase in their costs. They need to make a larger jump.

  2. There’s just no way around it… they are providing a service at very low cost (talking about their letter mail service, not the priority package stuff), and demand for it has collapsed.

    Any business has only two options (aside from massive restructuring and efficiency overhauls): cut branches/hours, or raise prices. Looks like they’re going to do both.

    They also have no choice but to keep prices competitive with UPS and FedEx, who provide direct competition with their larger shipping services. Meanwhile, nobody else can come close to being able to do home delivery of small letters for the price they’re offering, so obviously they should go and raise those prices.

    The Forever stamps are something I did always find perplexing… they’re a good idea but not when they’re the same price as the current 1st class stamp price. I guess they’re hoping it would encourage people to buy a LOT of stamps now, but I wouldn’t blame them if they made the Forever stamps perpetually 3 cents higher than current prices. There should be a cost associated with wanting some future-proofing.

  3. Cindy says:

    It is true that letters will go away eventually. The lack of volume will drive the cost of mailing a proper wedding invitation up tremendously. In my opinion, they’re a strong competitor against other couriers like Fedex and UPS. I find USPS cheaper because they don’t add residential, Saturday delivery, and fuel surcharges… and of course they have those flat rate boxes.

    Who waits in line in the post office nowadays anyway? You can finish off your package at home by printing postage online, or use one of those automated shipping machines at the post office 24/7 (saves you a piece of paper and ink too).

    The sad thing is, there’s only so much USPS can offer as a residential service. It’s not like we’ll mail out more stuff if USPS becomes better. The only way that they can get back into the black zone is if they make themselves attractive to big online stores like Amazon and such and forget about serving people like you and I.

    Ever thought of why nobody mail letters with Fedex and UPS? It’s still a bargain even if postage goes up to *gasp* $1.00 for a cross-country letter. I sure do wish USPS survives.

  4. Rob O. says:

    Unfortunately, many of the USPS locations do not have the automated shipping kiosks.

    Give quality customer service and your customers won’t mind paying a bit more! But I suspect USPS does the opposite because they bank on having a captive audience. The continual price hikes on postage would be far easier to bear if customer service wasn’t at the same time plummeting.

    I have NO complaints about my carrier and home mail delivery – my issues are all squarely with the post office itself. If you know there’ll be a surge in customer service demand at Noon, staff accordingly. Likewise, if you know people will be rushing around at the end of the day to get off work and get over to pickup packages, why shutter the lobby doors at 5 sharp? That’s just aggravating and crummy service!

    • Cindy says:

      I don’t really see why the post office should provide better service than other businesses, such as banks. Don’t they also shut their doors at 5 sharp? Don’t they also tell you to wait on the phone “due to high call volume” on Monday mornings?

      I guess if people are so aggravated by the constant postage increase, they always have the option to post with Fedex and the alike. Last time I checked, it costs $13 to mail a letter to 250 miles away. I guess I can always stuff it into a carton box, shipped ground, for $5.

  5. zapeta says:

    I think the USPS provides a great value for the cost. They’ve made a lot of cuts to try to break even and so raising the rates is pretty much the only option they have left. I think they should figure out the stamp price they’d need to break even and set the price at that…why bother raising rates at all if it’s not going to allow them to break even?

  6. Tj says:

    UPS has always advertised to small businesses who are the big spenders not necessarily the consumers. I have a small business and use all 3 carriers( USPS, UPS and Fedex). I spend almost 2k a month sending small packages – 60% of my shipments are with USPS priority mail. Many companies never even explored shipping with the post office b/cos they didn’t realize how much they could save. I never even saw a USPS commercial until about a year, now I see them every where. I believe with their strong marketing focus, they’ll start inching towards black.

    • cubiclegeoff says:

      Thanks for providing a business perspective. I don’t understand why the USPS is only finally trying to reach businesses.

  7. Safeway_Sage says:

    Hehe…. I don’t care what they do. I have a BOATLOAD of those liberty stamps… heehee!

  8. shadox says:

    There a couple of interesting things here:

    1. As they increase the price of a stamp, they are driving more people to use alternatives (e.g. online bill pay), and long term are probably reducing their revenue and pushing themselves out of business.

    2. Over time, I predict that the USPS as an institution may disappear. I can see how it was valuable back in the day, but now there are so many other options, including FedEx and UPS – you have to ask yourself why the US government should be trying to compete in this space.

    • cubiclegeoff says:

      This is true, although some online payments still have extra fees. For example, to pay for my mortgage online costs $15 extra a month. A stamp costs 44 cents (or soon to be 46 cents), a bargain in comparison.

  9. cubiclegeoff says:

    I never understood why so many companies depend on UPS and such (although FedEx has saturday delivery and does a decent job, UPS, in my opinion, is just crap). USPS should be able to get some of these business customers. They just need to work harder for it maybe.

    • Dan says:

      I am an owner of a small business that does a lot of shipping. We use UPS for a few very important reasons. 1. UPS picks up the packages at the end of each day, daily for a flat weekly rate. 2. UPS (and Fedex) offers real-time tracking information that USPS doesn’t. 3. Insurance is easy to buy from UPS and 4. we use UPS because the rates are lower than FedEx. 5, UPS and Fedex’s delivery times are guaranteed. Features 1, 2 and 5 are critical to small business operations all of which USPS does not offer.

  10. The USPS has done a noble job of meeting customer needs, but times have changed and I’m not sure if it can continue to operate without a significant overhaul.

  11. cdiver says:

    What about delivery every other day based off of your address, Odds and Evens like for conserving irrigation water.

  12. Kate says:

    I hope that the USPS is able to figure out how to get out of the red. I do wish that the art of sending letters had not been lost to email. I have a friend who I corresponded with via letters for many years instead of email. There was something fun about picking out some stationary and writing longhand.

  13. David says:

    How about privatize USPS?

    • cubiclegeoff says:

      It’s probably such a low-profit business that it wouldn’t work. There’s a reason no one else does daily mail like the USPS.

      • saladdin says:

        Two things I think should be considered.

        1. It can’t be ran like a business and stay the way it is. The instant it becomes a “business” is the end of getting a stamp under $0.50. Like most government services it has many goals. Up until recently it could provide those goals while funding itself. Now it can’t. Turning it private will just be adding another FedEX, UPS and DHL into the mix. What if it can’t make it? Do we let it bankrupt and cease to exist allowing UPS/FEDEX to have everything?

        2. USPS is autorized under the Constitution. Legally, can we truly make it private?

        saladdin

  14. MikeZ says:

    One of the real problems with the post office is a significant source of their income is Junk Mail. They really aren’t gonna get much sympathy from the public in the future if most everything they drop in the mailbox is stuff we immediately throw in the recycle bin. And it would hurt them in the short term to get away from that revenue source.

  15. Steve says:

    They could always privatize the post office like Japan did.
    http://en.wikipedia.org/wiki/Japan_Post

  16. Eric says:

    paid the USPS for delivery confirmation. After checking their website multiple times, I finally called the person I sent the package to and it had been delivered. No delivery confirmation by the post office. I filed an online complaint, the reply I got, “we don’t guarantee you will get confirmation” They sure did not mind charging me a fee for the service.

    There are other factors affecting the USPS, but their total lack of customer service IS a factor. Why do people pay more to UPS or FedEx to ship a document overnight? Because it can be tracked and they actually provide the service the charge you for.

    • saladdin says:

      My experience has been the opposite. I have canceled online orders before when I saw that FEDEX is the carrier. They are crap to me.

      My best friend drives for UPS so I can call and have him pull packages and make sure “signature required” packages are delivered when I’m at work. I have never had an issue with the ole Postal Service.

      saladdin

  17. Jeffrey Milliman says:

    I think that most Americans completely take the USPS for granted like they do sewer services and trash removal. All three services should be taxed right along with Police and Fire Departments.

    Jeff Milliman

  18. eric says:

    I just bought some more forever stamps for the parents (they still like the snail mail way of paying bills.)

  19. FlyFisher says:

    Time to stock up on stamps!


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