Postage rate hike kicks in May 14 - Consumers

Postage rate hike kicks in May 14

Postage rate hike kicks in May 14
March 21, 2007
Randolph E. Schmid
azfamily.com
WASHINGTON ÇƒÓ The cost of mailing a letter will go up on May 14, but you'll be able to lock in that price ÇƒÓ no matter how rates rise in the future ÇƒÓ by buying the new "forever" stamp.
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Video: The forever stamp
The post office governing board agreed Monday to accept the new 41-cent rate for first class mail recommended in February by the independent Postal Regulatory Commission.
The board also agreed to the proposal for a "forever stamp," that will always be valid for mailing a letter no matter how much rates increase.
James C. Miller III, chairman of the postal board, said the forever stamp could go on sale as soon as next month, at the 41-cent rate.
The postal governors asked the regulatory commission to reconsider some of its proposals, saying the suggested price for sending things like catalogs was too high.
For most people, the first-class rate has the greatest impact and the cost of sending a letter will rise from 39 cents to 41 cents, a penny less than the Postal Service had originally requested.
But folks sending heavier letters ÇƒÓ such as wedding invitations ÇƒÓ will see a reduction in the price.
That's because the 41-cent rate is for the first ounce, but each additional ounce will cost just 17 cents, down from the current 24 cents.
That means a two-ounce letter will cost 58 cents to mail, compared with 63 cents now.
Also expected to be attractive to many people is the forever stamp.
The first forever stamps will sell for 41 cents apiece, but they won't have a price printed on them and they will remain valid for sending a letter regardless of any future rate increases.
While a forever stamp will always be valid for mailing a latter, that doesn't mean the price won't go up. If rates were to increase to 45 cents, for example, that's what a forever stamp would sell for. But stamps already purchased at a lower rate could still be used without adding extra postage.
In a telephone interview, Miller said there is no limit on sales of the forever stamps, but he said they are generally intended for consumers and won't be produced in the massive rolls often used by businesses.
Shape-based pricing is also included in the new rates. For example, if the contents of a First-class large envelope are folded and placed in a letter-sized envelope, mailers can reduce postage by as much as 39 cents per piece.
Implementation of one part of the new rates was delayed until July 15. That covers higher prices for magazines and newspapers. Miller said publishers need extra time to update their computers to the new rates.
Three other provisions of the ruling will take effect with the rest of the rates in May, but the post office asked the regulatory commission to reconsider them. Those are:
ǃÓStandard mail flats, a category largely composed of catalogs. The commission recommended an increase for some catalog mailers of as much as 40 percent, more than double what the Postal Service had proposed.
ǃÓThe surcharge for larger items that cannot be sorted by machines. The postal governors would like to see incentives for mailers to provide letters that can be processed at lower cost on sorting equipment, but the commission didn't make a differentiation.
ǃÓThe Priority Mail flat-rate box was set at $9.15 by the commission. The post office had recommended $8.80.
The post office applied for the higher rates last May and the regulatory commission issued its decision Feb. 26.
Postage rates last went up in January 2006.
Under new legislation the regulatory commission has been directed to devise a new, simplified system for setting postal rates, but the post office will be allowed to seek one more increase under the old system in the meantime.
Miller said the governors have not decided whether to do that.
The rates taking effect May 14 include:
ǃÓLetters, bill payments, greeting cards: 41 cents for the first ounce, up from 39 cents.
ǃÓWedding invitation (2-ounces), 58 cents, down from 63 cents.
ǃÓPostcard, 26 cents, up from 24 cents.
ǃÓPriority mail flat-rate envelope, $4.60, up from $4.05.
ǃÓExpress Mail flat-rate envelope, $16.25, up from $14.40.
ǃÓParcel Post, 1-pound package, $4.50, up from 3.95.
ǃÓBank statement, 2 ounces, presorted, 45.9 cents, down from 54.4 cents.
ǃÓUtility bill, barcoded, 31.2 cents, up from 29.3 cents.