What's behind the postage hike

[babylonsister]

http://www.latimes.com/business/la-fi-postal14may14,1,2413321.story?coll=la-headlines-business

What's behind the postage hike
A decline in first-class mail volume and higher health benefit costs are to blame. Fuel prices also are taking a bite.
By Scott J. Wilson, Times Staff Writer
May 14, 2007

The postal rate increase that goes into effect today comes at a crucial time for the United States Postal Service.

With Americans increasingly paying bills online and using e-mail for both personal and business correspondence, the Postal Service is facing a steady decline in first-class mail, its most profitable service. At the same time, its labor and fuel costs continue to rise. The changing conditions, Postmaster Gen. John E. Potter told Congress last month, "have challenged us like never before."

How much are rates going up today?

A first-class stamp is going up from 39 cents to 41 cents; overall, rates are going up 7.6%. One bonus: The new "forever" stamp will be good for first-class postage in the future even after rates go up, so you'll no longer have to hunt around for extra 2- or 3-cent stamps.

Along with price increases, the Postal Service is introducing "shape-based pricing." Prices will no longer be determined solely on weight, because the Postal Service wants to encourage consumers and businesses to use envelopes and package sizes that are easier for automated processing.

more...

[trotsky]

1. Even at 41 cents, still an incredible bargain.

Having interfaced with a few post offices in Europe, I realized that we Americans have no clue how freaking good we've got it.

[BOSSHOG]

5. Agreed

We sent a Mother's Day Card to my Mother in Law, 1,100 miles northwest and we sent a Card to my Step Mother, 800 miles southeast for a total of 78 cents. The cards cost almost 6 bucks. I have no qualms with the cost of postage. Think a moment about what we get and it is a bargain.

[SpiralHawk]

2. What's behind the hike? republicon incompetence and greed.

fer sure.

[havocmom]

9. That one is gonna be rough on dial-up DUers

resize is kind ;)

[liberal N proud]

10. That's rough on T1 connections

[havocmom]

16. My DSL didn't like it at all, but I have my doubts about the 'Dedicated' part of DSL

where I live.

[DS1]

11. Was that really necessary?

[Vinnie From Indy]

18. A very pig like thing to do with bandwidth don't you think!

Where is the ignore function?

[Cronus Protagonist]

3. Stick a fork in it then

Let's see, less people are using the mail, revenues are falling, costs are rising, so the answer is to raise the prices and make even less people use the mail? Someone failed econ 101 here. This is a death spiral, and I ship all my stuff US mail, so this is another kick in the ass to go with UPS instead... there's no business logic behind this crazy move.

[Perky]

4. The internets

Look most peoplenowpay their bills online and very few correspondance is done by snail mail.

Yet the Postal system still has to have the labor force to service the country, still has to maintain a huge fleet of vehicles ans still has to pay for all those post offices across the country. They have suffered a huge decline in revenue in the last 15 years while their costs has remained constant.

[BuelahWitch]

7. Yeah, but the lines are just as long

The internets may have cut off some postal revenue, but whenever I go there to ship a package (for an eBay or Amazon.com sale) I generally have to stand in a long line.
So while I am sending less of my bills through the mail, I am sending and receiving more packages because I buy and sell online.

[Atman]

6. The only purpose of the PO now is if you DON'T want it to get there fast.

Seriously. About the only time I use the post office is if I want to make a payment for something but make sure it's delayed a few days, or if the recipient doesn't take online payments. If I want a package to get to it's destination quickly, safely, insured and trackable, I have lots of other options. The PO is just a stall tactic anymore. Raising the rates only hastens its own demise, assuring that more people will seek out alternatives to using them, which will set off another rate hike, leading to further declines...etc...etc...etc...

.

[napi21]

8. I'm SURE first class mailing has dropped dramatically!

I know I only mailed 5 pieces of first class mail all last year, and that's only because it was a payment to someone who just wouldn't accept bill pay. HOWEVER!!!! There's been a dramatic INCREASE in package shipment since the explosion of the internet too! Look at the sales volume of Ebay sometime! Somehow I think the Priority Mail and Parcel Post shipments should make up for their loss of First Class!

[InvisibleTouch]

12. Mostly rising fuel costs, I suspect.

That'll continue to be a factor in price hikes on everything else too, from food to clothing to household goods. More incentive to buy local and repair/reduce/reuse/recycle.

[MisterHowdy]

13. Postal worker wages.

I don't know how much postal workers earn in the US.
But in Canada they make huge salaries. They are unskilled laborers earning well in excess of 50,000/yr CDN.
My sister works for CanadaPost and shes making around 25.00/hr.
Don't get me wrong, I'm pro-labor but this is ridiculous.
They make more money than most skilled laborers and professionals.
And with their postal union they can get away with murder. They could, literaly, jerk-off on the sorting lines and NOT get fired.

But maybe in the US postal system workers are paid very little. I don't know.

[NashVegas]

14. When a Stamp Cost 8 Cents

Gas was about 42 cents per gallon.
The average new car cost about $3,500

Bread, milk, I can't quite remember. But you can bet it was equally, relatively cheap.

[Ino]

15. I pay as many bills online as I can

after having to pay late charges because my payment took 2 weeks to go across town, or never arrived... plus bills I never received... plus mail I found on my lawn

If I MUST mail something, and want to be SURE it gets there, I send it certified or proof of delivery or such -- just because I think they'll pay more attention. It's like tipping the Skycap.

They've only themselves to blame for loss of revenue.

[tjwash]

17. I don't think I've used a postage stamp in years.

I pay all my bills online, and send out emails instead of letters. If I need to send a package, I fedex it.