The Postal Service will implement this weekend’s mandated price reductions, which will cost approximately $2 billion in annual revenue.
The reductions are required because the Postal Regulatory Commission (PRC) has ordered USPS to reverse an exigent surcharge in place since January 2014.
The PRC granted the surcharge to recover $4.6 billion in postal revenue losses stemming from the Great Recession. This amount only partially offset USPS losses, which exceeded an estimated $7 billion in 2009 alone.
The Postal Service has improved efficiency, reduced costs and grown its package business. However, the organization continues to record unsustainable financial losses due to changing market conditions and legislative and regulatory mandates.
This weekend’s price reductions magnify the importance of a PRC rate system review later this year, USPS leaders say. On April 7, the Postal Service asked the PRC to clarify the scope of the critical review, aiming to make the process more expeditious and efficient.
“To properly compete for customers and continue to meet America’s evolving mailing and shipping needs, the Postal Service needs the financial capability to invest in the future,” said PMG Megan J. Brennan. “We continue to seek legislative reforms to put the Postal Service back on a sustainable financial path, and pricing is an important component.”
Among other proposals, USPS is seeking congressional action to make the exigent surcharge permanent.
Under the April 10 changes, the price of a Forever Stamp will fall to 47 cents, down from 49 cents.
First-Class Mail letters with additional ounces will be 21 cents (from 22 cents), postcards will be 34 cents (from 35 cents), and letters and postcards to international destinations will be $1.15 (from $1.20). Some commercial prices will also decrease.