Q. Why is the Postal Service raising rates again only six months after the last rate increase?

A. The rates, effective July 1, 2001, are a modification of the rates recommended by the Postal Rate Commission (PRC) and implemented under protest by the Governors on January 7 of this year.

The rates recommended by the PRC provide less revenue than the evidence provided by the Postal Service indicated is needed.

First, the Governors must reject the Commission’s recommendation and send it back to the PRC for reconsideration. Upon the PRC’s further rejection of Recommended Decision, the Governors may modify if they vote unanimously to do so. The Governors exercised their authority on May 7 and voted to implement the modified rates on July 1.

Q. Will there be another rate filing this summer?

A. Postal Service management continues to take measures cutting costs and building revenues. Although it is premature to say when the next rate case will be filed, the Governors, at their February 2001 meeting, directed postal management to begin preparation of another rate case.

Q. Have the Governors ever modified the rates resulting from an omnibus rate case before?

A. Yes, in one other omnibus rate case. In 1981, the Governors modified the Recommended Decision of the PRC.

Q. How is the Postal Service cutting costs?

A. The Postal Service continues to focus on cost reductions. However, like any business, the pressure of inflation causes our costs to rise. In fiscal year 2000, significant cost reductions were made to national programs and initiatives.

Every year, the Postal Service delivers to 1.7 million more addresses than the year before. Last year, Total Factor Productivity improved by 2.5 percent, which is the equivalent of reducing expenses by $1.6 billion. We will continue to strive to deliver mail to more people with fewer resources.

Postal Service officials announced in April a second round of budget cuts and actions aimed at stemming a projected loss that could exceed $2 billion for fiscal year 2001. The Postal Service has committed to reducing costs by $2.5 billion by 2003. Over the next five years, the USPS plans to cut 75,000 work years from its costs, reducing administrative costs by 25 percent and reducing transportation costs by 10 percent.

Q. Will International rates go up also?

A. No, there are no changes to international rates. The only change to international mail is to the Recorded Delivery fee, which will increase from $1.90 to $2.10.

Rate Implementation Calendar