WASHINGTON (AP) -- It'll cost another penny to mail a letter next year.
The
cash-strapped U.S. Postal Service said Thursday that it will raise
postage rates on Jan. 27, including a 1-cent increase in the cost of
first-class mail to 46 cents.
It also will
introduce a new global "forever" stamp, allowing customers to mail
first-class letters anywhere in the world for one set price of $1.10.
Currently, the prices vary depending on the international destination,
with letters to Canada and Mexico costing 85 cents.
Under
the law, the post office cannot raise stamp prices more than the rate
of inflation, or 2.6 percent, unless it gets special permission. The
post office, which expects to lose a record $15 billion this year, has
asked Congress to give it new authority to raise prices by 5 cents, but
lawmakers have failed to act.
The mail agency also will increase rates on its shipping services, such as priority mail, by an average of 4 percent.
The
post office, which is struggling with debt and low cash flow, said the
rate hikes were partly aimed at bringing in new revenue while
maintaining its pricing advantage in the shipping business. Private
companies such as UPS and FedEx, which offer similar shipping services,
regularly adjust their prices.
The post office
lost $5.1 billion in fiscal 2011, mostly due to a 5.8 percent decline
in revenue for first-class mail. Financial results are expected to be
even worse when final figures for fiscal 2012 are released next month.
Earlier this year, it was forced to default on two payments due to the
Treasury totaling $11.1 billion for future retiree health benefits
because it lacked sufficient cash reserves.
While
the Postal Service has said it will continue seeking ways to cut costs,
Postmaster General Patrick Donahoe has made clear that the agency has
little left it can do to bring in significant new revenue. After months
of congressional delay, he said it's now up to lawmakers to pass a
postal fix when they return to Washington after the November elections.
The
latest rate increase, for instance, will make only a small dent in the
Postal Service's losses, caused by the economic downturn, movement of
mail to the Internet and a congressional requirement that the mail
agency fund future retiree medical benefits years in advance. Earlier
this year, the mail agency floated a proposal to Congress aimed at
increasing stamp prices to 50 cents as a way to generate $1 billion in
new revenue.
The Postal Service has also asked
Congress to allow it reduce mail delivery from six to five days a week
and reduce its annual $5 billion payment for the future retiree health
benefits.
The current 45-cent rate for
first-class mail in the U.S. has been in effect since January. Since
2006, the Postal Service has now increased the price of the stamp five
times, from 39 cents to 46 cents.
Because
stamps are now being issued as forever stamps, they will remain good for
first-class postage. But buying new forever stamps will cost more when
the prices go up.
While the price for the
first ounce of a first-class letter will rise to 46 cents, the cost for
each additional ounce will remain at the current 20 cents.
Other price increases:
-Postcards will go up one penny to 33 cents.
-Priority mail, small box, $5.80; medium box, $12.35; large box, $16.85.
-Priority mail, regular envelope, $5.60; legal envelope, $5.75; padded envelope, $5.95.
-Delivery confirmation will be free on packages, including priority mail and parcel post, rather than being an extra charge.
The
Postal Service, an independent agency of government, does not receive
tax money for its day-to-day operation but is subject to congressional
control.
Copyright 2012 by The Associated Press. All rights reserved.
