Stamp prices could be rising again as the U.S. Postal Service begins to review first-class mail, junk mail, periodicals and magazines. However, officials are worried that any increase will chase customers away.
The proposal comes after the Postal Service shelved a plan to end Saturday service when it became clear it didn’t have legal authority to do so.
The move to hike prices would go beyond the regular increases tied to the rate of inflation. It would affect those sending first-class mail, the most common type of mail consumers use, as well as businesses that mail periodicals, newspapers, magazines and marketing material.
The current price of a first-class stamp is 46 cents. A one-cent increase went to effect Jan. 28.
In the three months ended March 30, the agency lost $1.9 billion — less than the $3.2 billion lost in the year-earlier period.
The service was hurt as the volume of first-class mail decreased by 4.3%, said USPS chief financial officer Joseph Corbett.
“It’s extremely difficult to compete with free,” Corbett said, referring to electronic bill paying. However, he added that revenue from package delivery was up 9.3% compared to the same period last year.
The key culprit remains a 2006 congressional mandate that requires the service to prefund healthcare benefits for future retirees. The USPS has been borrowing billions of dollars from taxpayers to make up for the shortfalls.
The losses came despite major cost-cutting moves at the service. The Postal Service consolidated 60 processing plants and its roster of career employees fell to the lowest level since 1966, Corbett said.
The narrowed losses the past two quarters are due to the fact that the Postal Service is only forced to make one payment to prefund retiree healthcare benefits in the fiscal year that began Oct. 1. The year before, the agency had to make two payments after Congress allowed one to be delayed from fiscal 2011.
Unions argue that no other agency or private business is required to make such a payment, and have been pushing Congress to do away with the mandate. But so far, no legislation to help the agency that has advanced in Congress would dump the requirement.