The U.S. Postal Service on Thursday asked the Postal Regulatory Commission to approve a rise in the price of first-class mail stamps to 82 cents from the current 78 cents, with the change proposed to take effect on July 12. If authorized, the adjustment would raise overall mailing services prices by 4.8%.
USPS officials have repeatedly warned they could run out of cash as soon as February. The stamp proposal is one of several measures the agency has pursued to address an extended period of operating losses and immediate liquidity pressure.
Earlier this week the Postal Regulatory Commission approved a temporary 8% surcharge on priority mail and package deliveries to help offset higher transportation and fuel costs. That surcharge is scheduled to begin April 26 and is planned to remain in place through January 17.
Separately, the commission authorized a USPS plan to suspend employer pension contributions starting Friday. The suspension is intended to conserve roughly $200 million in cash every two weeks, equating to about $2.5 billion through September 30 under current projections.
USPS has reported cumulative net losses of $118 billion since 2007, a decline driven in part by a sustained fall in first-class mail volumes to their lowest levels since the late 1960s. In February the agency recorded a quarterly loss of $1.25 billion.
Reuters has reported that the Postal Service reached an agreement with Amazon that would result in the retailer using USPS for at least 1 billion packages annually, representing roughly 80% of the retailer's package volume last year. The arrangement is part of the agency's efforts to stabilize package revenue, which has become increasingly important as first-class mail volumes have fallen.
In March, Postmaster General David Steiner disclosed that USPS had engaged restructuring advisers to help tackle its mounting financial problems. Steiner has also signaled a desire for broader pricing flexibility, saying he wants the authority to raise first-class stamp prices above the current 78 cents and has suggested Americans might accept rates of 90 or 95 cents per letter, noting that many other countries have rates above $2.
Context and next steps
The proposed stamp increase must be approved by the Postal Regulatory Commission before taking effect. Meanwhile, temporary package surcharges and the suspension of pension contributions have been authorized and are intended to provide short-term relief. The agency faces both a multi-decade decline in its historically profitable first-class mail product and near-term cash pressure that it says could become critical in the coming months.