The USPS said that prices for letters, postcards, and other postal services will be raised this summer as part of Postmaster Louis DeJoy’s 10-year plan to fix the agency’s struggling finances. The price of a first-class stamp will rise to 58 cents from the current 55 cents.
DeJoy, whose term has been marred by criticism over the service’s operational changes, revealed a 10-year plan to modernize the USPS earlier this year. He claimed the adjustments are needed to stop billions of dollars in losses and get the agency back on track to profitability, and on Friday he said hiking postal prices is part of that effort.
Single-piece first-class mail volume, such as letters that have postages stamps, has declined 47% during the past 10 years, the USPS said Friday. Even with the latest increase, the USPS said it will continue to have “some of the lowest letter-mail postage rates in the industrialized world” when they go into effect on August 29. Overall, the USPS said mail prices will rise almost 7%.
However, the USPS’s on-time delivery rates have deteriorated in recent months, with 1 in 5 pieces of mail delivered late to families and businesses throughout the country in the first three months of 2021. According to Paul Steidler, asking consumers and businesses to pay more for a service that is underperforming might result in a further loss of postal revenue.
“People are willing to pay more for mail but want a guarantee, or at least an assurance, that it will be delivered on time,” Steidler said.
He added, “To come out and say you’re going to ask for close to a 7% hike in that atmosphere, and at a time when there is fragility in the economy, that is, I think, going to do more harm than good.”
The price hike on first-class stamps and other services is part of a “logical pricing policy that allows us stay viable and competitive while providing dependable postal services that are among the most cheap in the world,” according to DeJoy.
Key components of DeJoy’s 10-year plan have been criticized, notably the implementation of slower delivery standards and the proposed closure of several postal operations. The idea would, for example, lower the USPS’ first-class mail service standard to six days, compared to the existing three-day delivery norm for any destination inside the continental United States.
Some consumers may object to paying more for stamps and services when delivery times are longer, potentially leading to a negative spiral in which postal consumers continue to migrate their business away from the USPS, according to Steidler.