Postal service rates might increase according to USPS predictions

The US Postal Service (USPS) has announced a series of price increases for its mail services, set to take effect on July 14, 2024. This move is part of a ten-year plan aimed at modernizing and competing effectively in the market.

The price of First-Class stamps, currently at 68 cents, is set to rise by 5 cents, bringing the price to 73 cents. This increase follows a series of price hikes in recent years. In 2019, First-Class stamps cost just 50 cents, and in July 2023, the price was increased by 3 cents. Just several months later in January, the price was raised again by another 2 cents.

The Postal Regulatory Commission, which has regulatory oversight over the Postal Service, must deem the proposed hike necessary for the future financial stability of the USPS and approve the request for the rate rise to go ahead.

Despite the decline in First-Class mail usage due to online communication, many small businesses still rely on the USPS. According to reports, the USPS facilitates the majority of shipping in the US, particularly for small and medium-sized businesses.

The increasing cost of stamps and other USPS mailing services will be an additional expense for small businesses. Small businesses may be facing increased costs in other areas, such as energy and salaries, in addition to the USPS price hikes.

Similar increases have been proposed for metered letters, international mail, and postcards. Domestic postcard prices will increase from 53 cents to 56 cents, and international postcards from $1.55 to $1.65. Special services, such as certified mail and order fees, are also due to see a price hike.

Postal insurance will benefit from a 10% reduction when items are mailed. However, other services, including Post Office box rentals, will remain untouched by the price increase.

Louis DeJoy, US Postmaster General, has warned customers to expect "uncomfortable" increases. DeJoy believes the rate hikes are overdue due to a "defective pricing model" lasting at least ten years.

According to a CNN report, USPS claims its prices are among the most affordable in the world. Despite this, the price increases will undoubtedly impact small businesses, which use the Post Office at least once a week, as found in an Office of the Inspector General survey in 2020.

Small businesses should be aware of the date when the price hikes are expected to come into force to factor in the additional costs accordingly. The USPS's price hikes are a significant part of its strategy to modernize and compete effectively in the market.