Challenged by ongoing financial struggles, the U.S. Postal Service has announced plans to increase stamp prices in 2014. Slated to take effect in January, the price hikes are aimed at generating an additional $2 billion in revenue for the USPS, which is expected to record a loss of $6 billion this fiscal year.
The proposed price increases – which are above annual rises associated with the Consumer Price Index – are necessary to ensure that the Postal Service will be able to develop and offer the quality customers demand, said Mickey Barnett, chairman of the USPS board of governors. "Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges," Barnett said, in a statement.
Noting that the service posted a net loss of $15.9 billion last year, postal officials plan to increase the cost of a first-class mail single-piece letter from 46 cents to 49 cents. First-class postcards will see a one cent jump to 34 cents. Additionally, pricing for standard mail, periodicals, package services and extra services is also being hiked.
The proposed price increases have been met with derision by groups like the Direct Marketing Association. "DMA is seriously concerned that this action will significantly harm the Postal Service and the mailing industry in the very near future," the trade organization said, in a statement. "The problem of decreased mail volume will only worsen as mailers cease to rely upon the United States Mail to reach consumers."
The proposed price changes must be approved by the Postal Regulatory Commission. While the service's board of governors is pressing forward with plans to institute price hikes, Barnett said that legislators could help ease the financial burdens of the USPS. "If these financial challenges were alleviated by the timely enactment of laws that close a $20 billion budget gap, the Postal Service would reconsider its pricing strategy," Barnett said.