The USPS Submits 5.4 % Postal Rate Increase

The U.S. Postal Service today filed a 5.4% postal rate increase on almost all classes and subclasses of mail and special services. If the increase is passed, “the rates will apply equally across the board” and take effect early next year, says USPS spokesman Gerald McKiernan. The last postal rate hike took effect June 30, 2002, when catalog rates increased 7%-10%.

While a 5.4% rate hike would take a bite out of mailers’ bottom lines, it’s a vast improvement from the double-digit postal rate increase many were predicted months ago. And there’s still a chance that the rate hike may not happen. The request for a rate increase stems from the requirement of Public Law 108-18 that the USPS establish a $3.1 billion escrow fund. (The law does not stipulate how the funds are to be used.) If legislation is passed that eliminates the escrow funding requirement, mailers could get a break. “If the escrow account is reversed, the Postmaster General [Jack Potter] says that the proposed rate increase will be removed,” McKiernan says.

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