Question
http://www.sunherald.com/mld/sunherald/14488209.htm
Post office proposes 3-cent rate increase
RANDOLPH E. SCHMID
Associated Press
WASHINGTON - The Postal Service said Wednesday it wants to raise the price of a first-class stamp by 3 cents - to 42 cents - and suggested a "forever" stamp that people could use as hedge against future rate inflation.
The changes would take effect in the spring of 2007 if approved by the independent Postal Rate Commission.
"A forever stamp would help ease the transition to any future price adjustments," board Chairman James C. Miller III said.
Postmaster General John E. Potter said the agency would not be making a rate change if it were not necessary.
"The Postal Service is not immune to the cost pressures affecting every household and business in America," Potter said.
For example, each penny increase in the price of a gallon of gasoline costs the post office $8 million, and payroll, health expenses and other costs also have been rising.
And, unlike private delivery companies, the post office cannot simply add a fuel surcharge to its rates.
The forever stamp would help soften the blow of a rate increase by allowing customers to stock up. As originally proposed it would sell for the first class rate and, once purchased, the special stamp would remain valid for whatever the first-class rate is when it is used, regardless of future increases.
Once the post office proposes a rate change, including the new stamp, the matter goes to the Postal Rate Commission, which holds hearings and has 10 months to consider the matter before responding.
The earliest a change would take effect would be May 2007.
The cost of a first-class stamp went from 37 cents to 39 cents in January. Before that, the price had been unchanged since 2002.
The proposed increase would boost the price of mailing a letter to 42 cents.
The increase in January was required so the post office could place some $3 billion in an escrow account, a step required in law.
The House and Senate have both passed bills to eliminate that requirement and efforts are under way to resolve differences between the two versions, but it also faces the threat of a presidential veto.
Since that increase went into the escrow account, the Postal Service still must cover rising costs of fuel, salaries, equipment and other expenses.
In addition to its own fuel expenses, the post office has about 70,000 employees who use their own vehicles and are reimbursed for fuel costs, and there are some 17,000 contractors whose rates are adjusted for rising fuel costs.
Overall, the Postal Service expects to finish this fiscal year about $2 billion in the red.
While a 3-cent increase in first-class stamps would be the most visible change, rates will change for other types of mail also.
For example, it currently costs 63 cents to mail a two-ounce first-class item whether it's a letter, large flat envelope or package. But the post office makes more than 30 cents on the letter, 10 cents on the flat and loses money on the package.
That means the agency will be looking at shape as well as weight in setting new rates, officials have said, particularly in the face of a decline in first-class mail as more people pay bills and send messages via the Internet.
Congress mandated the escrow requirement in 2003 when it passed a law reducing the amount of money the agency has to pay into its retirement system, which auditors said was being overfunded. Instead, Congress ordered the money to be used to reduce debt and, when that was done, to be put into the escrow fund.
The White House has opposed the release of the money from the fund because placing it there counts as income for the federal government and releasing it would have the effect of raising the deficit.
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While a 3-cent increase in first-class stamps would be the most visible change, rates will change for other types of mail also.
For example, it currently costs 63 cents to mail a two-ounce first-class item whether it's a letter, large flat envelope or package. But the post office makes more than 30 cents on the letter, 10 cents on the flat and loses money on the package.
That means the agency will be looking at shape as well as weight in setting new rates, officials have said, particularly in the face of a decline in first-class mail as more people pay bills and send messages via the Internet.
Hmmm. That's not good news for much of my sales...
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Break out the violins. If they lose so much money, why do they have a surplus?
Sheesh. They should just put in a standing order for an annual increase and cut the pretenses.
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For starters, they could get rid of all the convoluted rules and regulations and simply ask "how much does it weigh and how fast to you want it to get there".
I, for one, think they should abolish media mail and BPM... it's substandard service, anyhow and if you're a seller using it, it's only a matter of time before you get angry customers. (our record late parcel using media mail was 42 days... ) It's pretty silly to base a shipping cost on what's inside the box!
Oh... and perhaps they could dump the career conditional requirement for employees serving over x years (I think x equals 2 years). If they started running the organization like a business and not just another over-managed government bureaucracy, perhaps they would have fewer problems.
</rant>
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I, for one, think they should abolish media mail and BPM... it's substandard service, anyhow and if you're a seller using it, it's only a matter of time before you get angry customers. (our record late parcel using media mail was 42 days... ) It's pretty silly to base a shipping cost on what's inside the box!
99.9% of my books are sent media mail, by customer choice. In the past several years I have noticed much better delivery times by the USPS using media. The vast majority now actually do make it to their destinations within the time line the USPS gives. I've been using media mail for the past seven years with hardly ever a problem.
You might want to see it abolished but there are many booksellers that won't.
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You might want to see it abolished but there are many booksellers that won't.
I should clarify my statement, as I can see how doing away with media/BPM would hit booksellers hard.
I don't know the breakdown as far as how much the USPS profits/loses from each class of mail... having said that, I could not support continuing that service if media/BPM is subsidized by other classes. However, for all I know, media mail could be a big money maker for the USPS... I don't see how, but if that's the case, I'd be OK with it.
I just can't agree that having a different price structure depending on what you ship can be a good thing overall.
I don't want to see any changes hurt any seller... but what I do want is for the Postal Service to be managed properly and efficiently. Perhaps if they were able to spend less time and money on sorting out all the different classes, ALL mail would be handled better and more efficently (less costly)... maybe.
Cheers
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The various classes of mail do help the USPS smooth out the huge lumps and bumps in the system. For instance, when there's a lot of first class and Priority mail in the system, the slower classes can get bumped to slower service. The other option when there's lots of mail is to slow ALL the classes down to a crawl or hire a lot of temporary employees during some seasons (NOT a way to get good service, in my experience)
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A friend of mine is a postmaster in the next small town and she has told us in the past how much better the postal service is doing since ebay started.
Look at all the packages going out that weren't there before.
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I don't mind so much that they're asking for an increase. (Please, don't kick me!)
Seeing how the postal service works (actually, DOESN'T) in other countries makes me feel that we in the USA are STILL getting a bargin service!
The time it takes to update my sites with the new rates, though....... GRRRRRRR!!!!!!!!
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The good news for those of you who purchase post office insurance is that the insurance fees look like they will be going down by .05 cents.