Facing a “precarious financial condition” as fewer customers use its services, the United States Postal Service proposed another round of rate increases Wednesday to go into effect in January – its largest price increase since 2002.
The plan – which would raise the cost of first-class stamps for one-ounce letters to 49 cents from 46 cents, among other changes – is intended to generate an additional $2 billion in annual revenue for the Postal Service. The agency expects to lose about $6 billion in the current fiscal year.
Postage rates jumped 1 cent in January 2012 and again in January 2013, but those changes were tied to increases in the Consumer Price Index, according to the Postal Service. The proposed 3-cent increase was the result of “extraordinary circumstances.”
In a letter sent to customers, Chairman Mickey D. Barnett said the Postal Service put together a five-year plan earlier this year to close a $20 billion budget gap and reduce its debt, but “the uncertain path toward enactment of postal reform legislation” had necessitated its rate adjustments.
“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,” Barnett wrote.