New Postal Rates Announced; Go Into Effect May 12

The U.S. Postal Service on February 11 announced an increase in postage rates, which will go into effect on May 12, 2008. The Postal Service also indicated that it will raise rates each year in May. Given the fact that the Postal Service is facing a $1 billion loss in revenue in fiscal year 2008 due to structural and cyclical factors, it is not surprising that it would like to raise rates on an annual basis. NAA predicted that - under postal reform - mailers will see smaller, but more frequent rate increases.

Under the new postal reform law, the Postal Service has new flexibility to raise or lower rates so long as the average price for a particular class of mail stays below the rate of inflation, as measured by the Consumer Price Index. The rate of inflation used by the Postal Service was 2.9 percent and was provided by the Postal Regulatory Commission.

The rate increase for the entire class of Standard Mail is 2.8 percent. For Standard Enhance Carrier Route flats - mail service used by newspapers to send Total Market Coverage products to non-subscribers - the rates are as follows:

• High Density ECR entered at the DDU (local post office) – 15.9 cents, up from 15.4 cents.

• Saturation ECR entered at DDU - 14.0 cents, up from 13.6 cents.

• High Density ECR entered at SCF (central facility) - 16.8 cents, up from 16.3 cents.

• Saturation ECR entered at the SCF – 14.9 cents, up from 14.5 cents.

The rate increase for the entire class of Periodical mail is 2.7 percent. Rates for Periodicals mail vary depending upon sorting, handling, weight and where the mail is drop-shipped. For example, for Within-the-County Periodicals the rates increase vary from a 2.4 percent increase for ECR, High Density and 1.7% increase for ECR Basic.

First Published:
March 12, 2008