Home > About USPS & News > Forms & Publications > Postal Periodicals & Publications > MailPro  > March/April 2007

MailPro
News for Mailing Professionals

Go Online to usps.com/ratecase.

USPS BOARD OF GOVERNORS SETS MAY 14 FOR NEW PRICES

This special edition of MailPro is devoted to providing you with information about new prices effective May 14. Both domestic and international mailing changes are included. We hope this publication will serve as a reference guide to the pricing changes ahead.

In their March 19 decision, the Governors of the U.S. Postal Service approved an increase in the price of a First-Class Mail stamp to 41 cents, authorized the issuance of the Forever Stamp, approved shape-based pricing and set May 14 as the date for implementation of these changes. However, the Board delayed implementation of new prices for Periodicals and requested reconsideration for three items. See "Request for Reconsideration" section below.

USPS proposed new rates on May 3, 2006, and the Postal Regulatory Commission (PRC) issued its recommendation on Feb. 26, 2007. The Governors spent considerable time deliberating the PRC’s recommendations — meeting six times and rewriting several drafts of their decision over 22 days — before voting.

“We praise the PRC for its early and thoughtful recommended decision,” said Board of Governors Chairman James C. Miller III, “and appreciate the comprehensive analysis the Postal Service staff provided in its rate proposal.”

Forever Stamp

The Governors approved the Forever Stamp, which will sell at the new 41-cent First-Class Mail 1-ounce letter rate. The value on these stamps will always be the 1-ounce letter rate and can be used for any future 1-ounce letter mailing without extra postage. “The Forever Stamp is a consumer innovation that delivers convenience and value and will help ease the transition for mailing letters when prices change,” said Chairman Miller.

Shape-based Pricing

The new prices also reflect differences in the costs of handling letters, large envelopes (flats) and packages. Mailers are encouraged to consider options available to reduce postage costs. For example, if the contents of a First-Class Mail large envelope are folded and placed in a letter-sized envelope, mailers can reduce postage by as much as 39 cents per piece.

Request for Reconsideration

The Governors, however, requested reconsideration of the PRC’s rate recommendations for Standard Mail flats (catalogs), the nonmachinable surcharge for First-Class Mail letters and the Priority Mail Flat Rate Box.

• Standard Mail flats — The Governors are concerned that price increases recommended bythe PRC may impose an unnecessary degree of “rate shock” on the catalog industry, particularly small businesses. The recommended increase for some catalog mailers is as much as 40 percent, which is more than double what the Postal Service had proposed.
• Nonmachinable surcharge — The PRC decision on First-Class Mail 2-ounce and 3-ounce letters does not differentiate between machinable and nonmachinable. The Governors believe this warrants further analysis to ensure there are incentives for mailers to provide letters that can be processed at lower cost on efficient sorting equipment.
• Priority Mail Flat Rate Box — The PRC recommended a rate of $9.15 for the Priority Mail Flat Rate Box, which is $1.05 above the current rate and 35 cents higher than the Postal Service proposal of $8.80. The Governors believe a rate below $9 would be more appropriate for this popular consumer and business product and would be cost-justified.

Delayed Implementation

The Governors also delayed until July 15 implementation of the new prices for Periodicals (magazines and newspapers) to allow time for the publishing industry to update computer software and adjust to the complexity of the PRC-recommended rate structure for Periodicals. USPS had proposed a single container charge for Periodicals to encourage efficiency, but the PRC recommended 55 different prices based on container type, entry point and level of sortation.

This special issue of MailPro is your quick, easy and convenient way to get details on a full range of pricing changes. The complete decision is available at usps.com/ratecase. FYI Go online to usps.com/ratecase.