Postal rate hike coming next month

It will cost a penny more for first-class postage stamps beginning Jan. 7, 2001, when the cost of a stamp will increase from 33 cents to 34 cents. Springfield Postmaster Robert Roberts said the independent Postal Rate Commission approved an average increase of 4.6 percent for all classes of postage.

The commission also approved a 1-pound Priority Mail rate of $3.50, and the 2-pound rate for Priority Mail increased from $3.20 to $3.95.

The 4.6 percent average increase was less than the Postal Service sought it had requested an overall average increase of 6 percent but the Postal Service's board of governors accepted the amount approved by the commission Dec. 5.

Roberts said the U.S. Postal Service's history shows that a review of postal rates is called for about every three to four years, and the last first-class postage increase occurred Jan. 10, 1999.

"We are required by law to break even. We are not allowed to make a profit on a continual basis," Roberts said.

He added that the mandate to break even is part of the reason the USPS only increases postage a little bit at a time."I get questions, why not 35 cents?' Our legislative mandate is to break even over time, and we don't think anyone should have to pay more than necessary ... to move the product," Roberts said.

Craig Bills owns AAA Mailing Service with his wife, Mary. He said the effect of the increase will vary by postage class.

"Postage increases as high as 16 percent in some areas, but there's no increase in other areas, like the 20-cent postcard," Bills said.

He said his company handles nine different categories of mail, and six of those are affected by the coming increase. But he said the first-class postage increase is pretty reasonable.

"The first-class letter for 34 cents is still quite a bargain for what you get. That you can send a letter from Springfield to New York City or (Los Angeles) and get it there in three to five days for 34 cents, that's a pretty inexpensive way to send something," Bills said.

On the other hand, Bills said, his company handles catalogs for several national clients, and the effect on that type of postage is larger.

"Catalogs are increasing and the postage is increasing on them, and therefore (clients) have budgeted certain amounts of money ... they've (also) committed to their printing for the year on how many catalogs they're going to print. So they've got to dig in and come up with some more money for postage than they had budgeted for so they can mail those catalogs," Bills said.

Bills said the increases for bound, printed matter and priority mail are also significant.

Tom Barr, president of Ozark Mailing, said he always hates to see postage increases. He said because the rate of the increase was less than the USPS sought, he worries that another rate hike could happen soon.

"Even though the rates go into effect Jan. 7, there's a chance that they may be even changed again ... but it would have to be a unanimous decision by the board of governors," Barr said.

Barr said for bulk mail particularly, the increases were less than what was requested by the USPS, and the goal at Ozark Mailing is to see that clients receive the best postage rate possible, depending where the mail is being sent.

"The postage rates are based, especially on the bulk side, on the more mail you have going to a specific area, the cheaper it gets," Bills said.

The price of gasoline is one reason for the rate increase, Roberts said. "Every time gas goes up one penny, it cost us, nationwide, $1 million ... last year alone, it cost us $300 million," Roberts said.

Roberts said another reason for the increase is technology technological changes and growing use of the Internet have resulted in a minor decrease in the use of first-class postage. He said the Postal Service is projecting that it may decline more, but the USPS has several plans in place to offset future declines in first-class postage use.

Roberts said determining which plan to use, if any, will depend on how much usage of first-class postage decreases.

But Roberts noted that the Postal Service also has begun looking at ways to cut its costs across the country. The USPS has begun a controlled reduction of administrative personnel at its Washington D.C. headquarters.

Roberts also said the Postal Service is increasing its use of automated equipment, which he said won't eliminate any jobs, but will prevent the need to hire more employees in the future.

Roberts said people can find out the effect of the increase on specific postage classifications is online at the U.S. Postal Service's Web site, http://www.usps.gov.