USPS seeks price adjustments -forever stamp
The Governors of the U.S. Postal Service today proposed a “forever stamp” as part of a broader rate adjustment plan that would go into effect next year. Customers would be able to purchase a special First-Class stamp that would be good for any future single-piece First Class letter mailing, no matter how prices might change beyond 2007.
“A forever stamp would help ease the transition to any future price adjustments,” said Board of Governors Chairman James C. Miller III.
On the broader plan, the Governors cited increasing costs for fuel and health care as among the reasons for today’s filing with the independent Postal Rate Commission (PRC) for price adjustments next year. The plan includes a three-cent increase in the price of a First-Class stamp. The annual effect is well below $6 for the average household.
“The Postal Service is not immune to the cost pressures affecting every household and business in America,” said PMG Jack Potter. “However, by the time new rates take effect next spring, the cost of a First-Class stamp will have increased by an average of just a penny a year during the last five years, less than many other consumer products and services.
As one of the nation’s largest transportation and delivery organizations, the Postal Service is extremely sensitive to rising energy costs. We operate a fleet of more than 260,000 delivery vehicles, supported by air transportation contracts, more than 17,000 long-haul surface transportation contracts and a network of more than 37,000 facilities.
Like other businesses, the Postal Service also has experienced significant growth in health benefit payments for more than 621,000 current employees and 445,000 retirees. In 2005 alone, these costs increased by $437 million, reaching a total of $6.6 billion.
When new rates are implemented in 2007, the price of a stamp will have grown at or below the rate of inflation since the last operational rate adjustment in 2002 — and since today’s Postal Service began operations in 1971.
As you know, Postal Service operations are funded solely by the sale of products and services, not by tax revenues. While other delivery services have responded to growing costs with fuel surcharges and annual rate increases, today’s filing is the first time since 2002 that the Postal Service is proposing to adjust rates to cover growth in operational costs.
A January 2006 rate increase was implemented solely to fund a $3.1 billion escrow account required by a 2003 federal law. Congress has not yet determined how the Postal Service may apply these funds.
source: USPS
October 11th, 2006 at 10:17 pm
Why leave an endless liability? The stamp could be made for
10 years bets or less, after that the rate stays the same.
For instance 42cents in 2007 good for 10years then its rate
stays at whatever rate is in 2017.
Also forever stamps of a particular year might have a month
on them so they couldn’t be used until 1 month later providing
guaranted float to the system. I’m not a mathamatician or financial
analyst but an unlimited forever stamp sounds like a ripe plum
for clever investment bankers or financial engineers or worse.
February 24th, 2007 at 4:02 pm
I think this is a good idea. I have lived through several postal rate increases where the Postal Department did not know what increase the Postal Governors would approve. So, the USPS came up with the idea of adding “Letter designation” stamps to be equal to whatever increase was approved. Now the USPS will not have to print as many interim “price increase” letter stamps and therefore save money. If one were to buy and hold a large volume of “Forever” stamps, I do not think it would be worth it to hold for 6 or 7 or 8 years to “make a killing”. Do the math: 42 cents x 1,000 = $420.00. This $420.00 would be tied up, say, 3 years. What interest is lost by the “wise investor” on that amount at a 2% rate? $25.20. If the next rate increase is only 2 cents, 44 x 1000 = 440.00. Initial investment: $420.00 + 25.20 = $445.20. So, “wise investor” would have invested $445.20 in something now only worth $440.00.
February 27th, 2007 at 9:12 am
[…] There was a story on NPR this morning on the postal service that said that they were looking into making a “forever” stamp: one that would always count as a first class stamp once sold. This seems like a very good idea, and I am glad that we might have this option. I frequently buy stamps and need just a few. If I knew I wouldn’t have to worry about price increases, I wouldn’t have a problem buying a whole roll of stamps. The post office doesn’t need to provide extra window service to me for a bunch of small purchases, and they don’t lose money on selling 1 and 2 cent stamps. I don’t know why they didn’t think of this sooner. More information here: PostalReporter.com Blog » USPS seeks price adjustments -forever stamp […]