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Wednesday, April 24, 2019

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Forced price reduction to worsen Postal Service’s financial condition

Forced price reduction to worsen Postal Service’s financial condition

WASHINGTON — A mandatory action requiring the United States Postal Service (USPS) to reduce certain prices will worsen the Postal Service’s financial condition by reducing revenue and increasing its net losses by approximately $2 billion per year, according to USPS.

The Postal Service is required to reduce certain prices, including the Forever stamp, on Sunday, April 10.

“The exigent surcharge granted to the Postal Service last year only partially alleviated our extreme multi-year revenue declines resulting from the Great Recession, which exceeded $7 billion in 2009 alone,” said Postmaster General and CEO Megan J. Brennan. “Removing the surcharge and reducing our prices is an irrational outcome considering the Postal Service’s precarious financial condition.”

An order from the Postal Regulatory Commission (PRC) requires the 4.3 percent exigent surcharge to be reversed after the Postal Service has collected surcharges totaling $4.6 billion.

USPS prices for Mailing Services are capped by law at the rate of inflation as measured by the Consumer Price Index. However, the law does allow for exigent pricing due to extraordinary or exceptional circumstances. That was the case when the Postal Service sought and ultimately received approval for the current exigent pricing, citing the severe effects of the Great Recession on Postal Service mail volume.

However, the PRC strictly limited the period of time that the Postal Service could continue to collect the exigent surcharge.

The surcharge removal means these First-Class letters currently costing 49 cents will now cost 47 cents. Postcards will also go from 35 cents to 34 cents.

Commercial prices will also decrease. A complete listing of the new prices, effective April 10, is available at

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.