Postal update: rate hike approved, reform in limbo

The governors of the U.S. Postal Service agreed on Nov. 14 to accept the Postal Rate Commission’s Nov. 1 recommended increases. Postal rates will go up an average of 5.4%, effective Jan. 8.

Though this increase is the first since 2002, it’s unlikely that another four years will pass without a rate hike. The Postal Service is said to already be planning to file for another increase, to be implemented in 2007.

“The decision, although it was clearly expected, may be the first in a series of annual postal rate increases,” says Bob McLean, executive director of the Arlington, VA-based Mailers Council. “If Congress does not enact postal reform, these increases could go on for years to come.” McLean expects the Postal Service to file its next rate case as early as March 2006, with another mid-single-digit increase almost certain to be approved.

But reform appears to be stalled, as S. 662, the sister bill to H.R. 22 — also known as the Postal Accountability and Enhancement Act — was as of mid-November being held up in the Senate. Sen. Kit Bond (R-MO) was blocking the Senate bill, claiming that it lacks language that would allow smaller mailers to challenge prices for first-class mail if those rates are not perceived as “fair and equitable.”

A vote can be forced, says Ben Cooper, chairman of the Coalition for a 21st Century Postal Service, effectively overhauling the Bond hold. But if and when the Senate bill is passed, a conference committee must still convene to vote on both bills as a single entity for legislation to be enacted. So it will likely be months before anything is decided.

Postal class Old rate New rate
First-class letter (1 oz.) $0.37 $0.39
Priority Mail (1 lb.) $3.85 $4.05
Express Mail (0.5 lb.) $13.55 $14.40
Express Mail (2 lb.) $17.85 $18.80
“Targeted” bulk mail (five-digit presort, 9-oz. flat) $0.54 $0.57

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