EcommerceBytes-NewsFlash, Number 3161 - September 26, 2013     1 of 4

USPS to Hike Rates Over Rate of Inflation Unless Congress Acts

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The United States Postal Service wants to raise the price of a First-Class Mail single-piece letter from 46 cents to 49 cents in January along with other rate changes as part of an emergency measure unless it gets relief from Congress, it said on Wednesday.

Postage price increases are capped at the rate of inflation as measured by the CPI-U, but the Postal Service is filing a price increase above Consumer Price Index (CPI) "due to extraordinary and exceptional circumstances which have contributed to continued financial losses." The Governors of the Postal Service voted Sept. 24 to seek price increases above the typical annual increases associated with changes in the CPI.

Pricing for Standard Mail, Periodicals, Package Services and Extra Services also will be adjusted as part of a filing to the Postal Regulatory Commission (PRC) scheduled to take place on September 26.

Board of Governors Chairman Mickey Barnett described the "precarious financial condition" of the Postal Service and the "uncertain path toward enactment of postal reform legislation." He said if Congress alleviated the Postal Service's financial challenge by a timely enactment of laws that close a $20 billion budget gap, the Postal Service would reconsider its pricing strategy. "We are encouraged by the recent introduction of comprehensive postal reform legislation in Congress, and despite an uncertain legislative process, we are hopeful that legislation can be enacted this year."

The USPS said its proposed changes were intended to generate $2 billion in incremental annual revenue. The Postal Regulatory Commission (PRC) will review the prices before they become effective January 26, 2014, and must agree the prices are consistent with applicable law.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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