USPS Postal Rates Going Up Jan. 22

The United States Postal Service announced a number of price changes designed to improve profitability on Tuesday, including a one cent hike in the price for first class stamp to 45 cents. That change, as well as several other price hikes, will go into effect January 22nd, and the independent agency hopes the moves will generate additional revenue to help the agency stave off bankruptcy.

Over the last decade or so, the USPS has begun losing massive amounts of money as more and more Americans embrace technology by paying bills online, using email for business communications, and using text messages rather than using s-called snail mail. In the four years through 2010 alone, US mail volume declined by a staggering 20 percent, costing the agency some $20 billion in lost revenue. And the losses are ballooning out of control, as the agency’s fiscal 2010 loss of $8.5 billion was more than double its 2009 loss of $3.8 billion.

The USPS has asked Congress to remove certain collective bargaining restrictions, which would allow the agency to lay off some 120,000 employees in an attempt to reduce costs. The agency also wants Congress to replace or modify existing health care and retirement plans for postal workers, reducing their cost to the agency, and has even asked for approval to discontinue Saturday mail delivery.

In addition to the one-cent price hike for first-class stamps, the USPS is also raising the price for letters to Canada and Mexico by 5 cents to 85 cents, increasing the postage for postcards by 3 cents to 32 cents, and raising the cost for letters to overseas destinations by 7 cents to $1.05. “The overall average price increase is small and is needed to help address our current financial crisis,” Postmaster General Patrick Donahoe said of the changes. “We continue to take actions within our control to increase revenue in other ways and to aggressively cut costs.”