The U.S. Postal Service said it will raise rates on postage for letters, postcards and other mail services this summer as part of Postmaster Louis DeJoy’s 10-year plan to overhaul the agency’s flailing finances. The cost of a stamp for first-class mail will increase to 58 cents from its current 55 cents.
DeJoy, whose tenure has been marked by controversy over his operational changes at the service, earlier this yeara 10-year plan to overhaul the USPS. He said the changes are necessary to stanch billions of dollars in losses and put the agency on the path to profitability — and on Friday he said raising postage rates are part of the effort to boost revenue.
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%.
But on-time delivery rates for the USPS have worsened in recent months, with 1 in 5 pieces of mail across the U.S.to households and businesses in the first three months of 2021. Asking consumers and businesses to pay more for a service that is underperforming could risk a further loss of postal business, said Paul Steidler, a senior fellow with the Lexington Institute, a public policy think tank based in Arlington, Virginia, and expert on the USPS.
“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 increase on first-class stamps and other services are part of a “a rational pricing approach that helps enable us to remain viable and competitive and offer reliable postal services that are among the most affordable in the world,” DeJoy said in a statement.
Critics have voiced concerns about key elements of DeJoy’s 10-year plan, including implementing slower delivery standards and planned closures of some postal offices. Notably, the plan would slow the USPS’ delivery standard for first-class mail to six days, compared with its current three-day delivery for any destination within the continental U.S.
Some customers may grumble at paying more for stamps and services when delivery times are slower, raising the risk of a downward spiral where postal customers continue to shift business away from the USPS, Steidler added.