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USPS Announces Expected Mid-Year Increase

USPS Postage Increase

Due to its convenience, at-home parcel delivery services have become the norm. Because they are so widely-used, the effects of supply and demand are coming into play. Be ready because noticeable changes are coming and they’re going to affect the way you send and receive packages.

The United States Postal Service (USPS) has announced their intention to implement a mid-year price increase. Yes, this is out of the ordinary. It is expected to raise some categories of mail an average of approximately 5 to 7.5 percent (some might be more, some less).

In a nutshell, USPS increases have been tied to CPI. But if the costs for delivering a certain category of mail are out of line with what they actually charge, the USPS has not been able to adjust pricing to reflect actual cost. They have been allowed an opportunity by Congress and the Postal Regulatory Commission (PRC, the rate-setting body) to make an adjustment to reflect actual costs.

It appears that among the highest increases are flat-sized pieces, particularly 1st class flats. This means it is more important than ever to utilize letter-size automation rates whenever possible. As a reminder the largest size for letter-size rate is 6 1/8″ height x 11.5″ length(width) with an aspect ratio (length divided by height) between 1.3 to 2.5.

The Postal Service has proposed a Market Dominant Rate increase that will be effective August 29, 2021 if approved, which is expected. I have attached the DFA (Delivering For America) Pricing Fact Sheet which explains why the increase is needed and the products impacted. Take a look at the full proposed pricing on the Notice 123 and additional information.

We recognize this will be a bit painful in the short-term. No one wants to see increased costs. However, in the long-term this will contribute to the overall health of the U.S. Postal Service and provide long-term stability. And to maintain some perspective, the USPS is still among the lowest cost providers of mail services in the industrialized world.

 

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