The U.S. Postal Service's Board of Governors said Wednesday it wants to raise the price of a first-class stamp to 49 cents -- an increase of three cents -- citing the agency's "precarious financial condition" and the uncertain prospects for postal overhaul legislation in Congress.
"Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges," board chairman Mickey Barnett wrote in a notice to customers.
The proposed increase must be approved by the independent Postal Regulatory Commission, and would go into effect next Jan. 26 if approved.
Under federal law the Postal Service cannot raise its prices more than the rate of inflation unless it gets approval from the commission. In seeking the increase, Barnett cited "extraordinary and exceptional circumstances which have contributed to continued financial losses" by the agency.
As part of the rate increase request, the cost for each additional ounce of first-class mail would increase by a penny, to 21 cents, and the price of mailing a postcard would also rise by a cent, to 34 cents. The cost of mailing a letter to an international destination would jump five cents, to $1.15.
Many consumers will not feel the increase immediately. “Forever stamps” bought before an increase would still cover first-class postage. The price of new forever stamps would be at the higher rate, if approved.
The Postal Service also said it would request price increases totaling 5.9 percent for bulk mail, periodicals and package service rates, according to a filing to be made with the commission Thursday.
Media and marketing businesses that rely on mailing items say a big increase in rates could hurt them and lower postal volume and revenues.
Rafe Morrissey, the Greeting Card Association's vice president of postal affairs, said that the rate increases were "no substitute for common-sense, structural reforms," and that the group hoped they would be rejected.
The Postal Service expects to lose $6 billion this year and is seeking help from Congress to fix its finances.
The agency has been struggling financially, operating at a net loss for the last six years. With the rise of email, online bill paying and increased competition from companies like UPS and FedEx, the Postal Service has been forced to find new ways to reduce costs.
Barnett said the increases, if approved, would generate $2 billion annually. The agency last raised postage rates on Jan. 27, including a penny increase in the cost of first-class mail, to 46 cents.
The Postal Service unsuccessfully sought an emergency 5.6 percent rate increase in 2010, citing the recession. The commission acknowledged that the recession had hurt revenues but said the rate request was more of an attempt to address long-term structural problems.
Barnett said the Postal Service would reconsider its rate request if Congress passes legislation to put the agency's finances back on track. But prospects in Congress are unclear.
A bipartisan bill in the Senate would end Saturday mail delivery after one year, and would cease door-to-door delivery for new residential and business addresses. The agency says ending Saturday mail delivery would save $2 billion each year. But many lawmakers, along with postal workers' unions, have resisted such changes, saying they would inconvenience customers.
Al Jazeera and The Associated Press