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Shaping a More Efficient Future

On May 2, 2006, the Governors of the U.S. Postal Service approved filing an omnibus rate case with the Postal Rate Commission to adjust postage rates in spring 2007 to cover increasing operational costs. Our proposal calls for a 3-cent increase in the price of a First-Class stamp and a new Forever Stamp that would be good for any future 1-ounce single-piece First-Class Mail® letter, no matter how prices may change beyond 2007.

Although postal rates did change January 8, that increase was the result of a federal law passed in 2003 requiring us to place $3.1 billion in escrow. This filing is the first time in nearly five years that we proposed to adjust postage rates to cover rising operational costs.

One of the over-riding principles in our proposal is that shape matters. Shape (letter, flat, or parcel) is important to us because the cost of handling each shape varies widely. And shape is important to you because it affects how you position your message or your product. 

Another objective of our pricing is to increase efficiency — using incentives to create a more efficient mail system so that the total cost of using the mail is kept as low as possible. Much of our proposed changes come under the familiar heading — worksharing — but we’re taking it a few steps further by adding additional incentives. Our goal is simple: We want to make using the mail a great value. 

We’re also proposing a Forever Stamp. The name says it all. Once purchased, the stamp would be good forever. The Forever Stamp should increase convenience for customers and help avoid the "last minute rush" to purchase stamps when new prices are implemented. The price for the Forever Stamp would be the same as the single-piece 1-ounce rate. Mailers could purchase this stamp and it would be valid anytime in the future for a 1 ounce single-piece First-Class Mail letter, no matter what the rate may be at the time of mailing. 

We also want to reduce the cost of handling undeliverable-as-addressed mail, and our proposal has bold initiatives that make it easier and cheaper for mailers to get updated addresses.

Several improvements in our pricing relationships and incentives are included in the proposal to send the right signals to enhance efficiency, offer more choices, and ensure that all types of mail cover its costs.

(see FUTURE)