Postal Rates Set for Summer Increase
The Associated Press
Mar 22 2002 8:19AM
WASHINGTON (AP) - The post office appears headed for a midsummer rate
increase - perhaps 3 cents more to mail a letter - after winning
near-unanimous agreement from businesses and organizations that usually
fight vigorously to prevent higher postal rates.
Without the usual opposition, the independent Postal Rate Commission gave
speeded-up consideration to the Postal Service's request for new rates.
The commission was issuing its decision Friday.
Under the Postal Service proposal, which could take effect as early as June
30, the cost of a first-class stamp would rise 3 cents to 37 cents, a 2-cent
boost would put the rate for post cards at 23 cents, and most other charges
would also go up.
Battered by declining business in a slow economy, the post office lost $1.68
billion last year and was anticipating a $1.35 billion loss this year after
freezing new construction and cutting 12,000 jobs.
The agency announced Sept. 11 it would seek higher rates to take effect this
fall.
Then the terror attacks, followed by the anthrax-by-mail infections, socked
the agency with hundreds of millions of dollars in additional costs for
cleanup and preventing future mail contamination.
Knowing that would plunge the post office into even worse financial straits,
Rate Commission Chairman George Omas suggested the post office and 60 or so
organizations that usually fight it out over rates to reach an agreement all
could accept.
In the end all but the American Postal Workers Union signed on to the deal,
which avoided months of hearings and arguments before the agency and
permitted the rapid rate decision.
The union, which represents workers who sort mail, argued that the rate
increases offered giant mailers discounts for presorting mail that exceed
the amount the Postal Service would save by not doing that work.
The post office responded the contention was fallacious, ``based on
speculation regarding postal revenues, finances and capital investment
plans.''
Organizations that would benefit from the discounts defended them. ``The
settlement rates are well within lawful limits,'' argued a group including
the Association for Postal Commerce, the Mailing and Fulfillment Service
Association and the Recording Industry Association of America.
While many that normally oppose rate increases accepted this one, it was not
always cheerfully.
Longtime rival United Parcel Service said that while it ``could find fault
with a number of the rates set forth in the settlement,'' it joined in the
agreement to help the post office ``respond to recent extraordinary events
and return to financial stability.''
One group of businesses commented that if the case had been fully argued,
its members would have fought for different rates.
``The settlement agreement represents, we believe, the best result that is
possible to achieve under current circumstances,'' said the group, which
included the Alliance of Nonprofit Mailers, AOL Time Warner, Coalition of
Religious Associations, Magazine Publishers of America and the National
Newspaper Association.
``However,'' the group added, ``the circumstances themselves - the need for
so much additional revenue so soon after the last two rate increases, based
on estimates developed prior to Sept. 11, 2001 - reflect poorly on the
Postal Service.''
In addition to the 37-cent rate for the first ounce of first-class mail,
other increases requested by the post office include:
Increase the postcard rate 2 cents to 23 cents.
A 1-pound priority mail item would rise 35 cents to $3.85.
Increases in parcel post, with a 5-pount item costing $4.19 to $7.25 now,
depending on distance, would rise to $5.03 to $9.43.
A half-pound Express Mail item would jump $1.20 to $13.65.
Certified mail would increase 20 cents to $2.30.
Insurance charges would go up for most mail, depending on amount of
insurance, but would be reduced for Express Mail.
The charge for a return receipt would go up 25 cents to $1.75.
