Postal Rate Hikes Approved, But Delayed for Periodicals
The Governors of the U.S. Postal Service (USPS) announced this week an increase in the price of first-class stamps to 41 cents and approved the issuance of the Forever stamp as well as shape-based pricing. There will be an 11.7 percent increase for out-of-county periodicals and an 18.3 percent increase for in-county periodicals. The Governors also revealed that these changes will be effective May 14.
The postal rate increases will likely have significant impacts on magazines, but Gordon Hughes, American Business Media’s president and CEO, says the hikes were not as high as some feared.
“As postal rate cases go, this has been a tough one, with even more varying points of view than in recent cases,” he said. “More analysis is necessary, but it appears that the efforts of our Washington counsel and our testifying members have prevented 20 percent and higher increases that would have resulted from the other proposals.”
The new rate of 41 cents is lower than the 42 cents the USPS initially called for. The periodicals increases approved by the USPS were much less than the 24.4 percent increase the USPS originally sought. In addition, the rate hikes on periodicals will not go into effect until July 14, two months after the proposed start date of May 14.
John A. Greco Jr., president of the Direct Marketing Association (DMA), views the increases as damaging. “The reduction in mail volume alone might well be enough to send the Postal Service into a death spiral of reduced revenue, halts to infrastructure improvements and increases in postage rates for all classes of mail,” he said.
The Forever Stamp, which has been the source of much debate, will always be valued at the current one-ounce letter rate and can be used for any future one-ounce letter mailing without extra postage, despite any future postal rate increases. “The Forever Stamp is a consumer innovation that delivers convenience and value, and will help ease the transition for mailing letters when prices change,” said James C. Miller III, chairman of the Governors of the USPS.