Mail still a bargain: Price changes are at or below inflation (U.S. Postal Service)

Like most Americans, you’re probably feeling the pinch at the fuel pump — and when you pay your household heat and electric bills. Not to mention ever-increasing health care costs.

It’s the same for the Postal Service. That’s why we’ve filed for price adjustments to take effect next year, including a 3-cent increase in the price of a First-Class stamp. Price changes will vary for other postal products and services. Even with adjustments, the U.S. Mail is still a great bargain.

“By the time new rates take effect in May or June of 2007, 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,” said Postmaster General Jack Potter.

Potter noted the price of a First-Class stamp has increased at rates lower than or equal to inflation since today’s Postal Service began operations in 1971 — while the cost of gasoline has doubled since the last USPS operational rate adjustment in 2002.

With every 1-cent increase in the price of fuel costing us $8 million a year, you can see that it’s a huge expense. Likewise health care costs are increasing across America. In 2005 alone, these costs increased by $437 million for the Postal Service, reaching a total of $6.6 billion to cover more than 621,000 current employees and 445,000 retirees.

While other delivery services have responded to growing costs with fuel and other surcharges along with annual rate increases, USPS doesn’t have the same flexibility as other businesses. The price you see is the price you pay, without extra fees tacked on.

“When you boil it down, the American people pay for the operation of the world’s largest and most efficient mail delivery system every time they buy postage,” said Potter.

And the amount they pay is minimal. The estimated cost of the proposed price adjustments for the average household is well below $6 annually, about 50 cents a month.

Potter said USPS will work with customers to minimize rate adjustments for mailers. “The new rates represent change for all of us. I’m convinced they also offer opportunities,” he said. “Over the next year, the Postal Service will work with customers to help them understand how they can take advantage of those opportunities. We can’t afford not to.”

Tune in to the next edition of MarketPlace! this week for more details on how we will be working with customers. Program host and Chief Marketing Officer Anita Bizzotto will discuss the rate adjustments with Pricing and Classification VP Stephen Kearney, joined by Pricing Manager Ashley Lyons and Specialty Pricing Manager Joe Moeller.

source: USPS