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    Susquehanna Raises Penn Entertainment Inc. (PENN) Price Target. – Yahoo Finance

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USPS Indicates Postage and Shipping Rates Could Rise

April 13, 2024
in Business
USPS Indicates Postage and Shipping Rates Could Rise
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The US Postal Service (USPS) plans to raise rates on certain products, including a 5-cent rise on First-Class ‘Forever’ stamps from 68 cents to 73 cents.

The request was made to the Postal Regulatory Commission, which has regulatory oversight over the Postal Service. The Commission must deem the proposed hike necessary for the future financial stability of the USPS and approve the request for the rate rise to go ahead.

If the price increase is approved, what equates to an almost 8% rise on the cost of many mailing services products, will come into effect on July 14, 2024.

Similar increases for metered letters, international mail and postcards have also been proposed. Domestic postcard prices will increase from 53 cents to 56 cents, and international postcards from $1.55 to $1.65. Special services are also due to see a price hike, such as certified mail and order fees. The USPS has however confirmed that other services will remain untouched, including Post Office box rentals. Meanwhile, postal insurance will benefit from a 10% reduction when items are mailed.

The price of stamps has soared in recent years. In 2019, First-Class stamps cost just 50 cents. In July 2023, the price was increased by 3 cents and just several months later in January, was raised again by another two cents.

The Postal Service says the price hikes are part of the agency’s ten-year plan to make it more contemporary and competitive. Louis DeJoy, US Postmaster General had warned about the rate hike earlier, saying customers should get used to “uncomfortable” increases. He said that the increases were overdue following “at least ten years of a defective pricing model.”

According to a CNN report, USPS says its “prices remain among the most affordable in the world.”

While online communication has reduced the need for First-Class mail, which has become a smaller part of the Postal Service’s business, many small businesses still rely on the USPS. Reports show that the majority of shipping in the US is facilitated by the USPS, especially for small and medium-sized businesses. In 2020, an Office of the Inspector General survey found that more than 30% of microbusinesses use the Post Office at least once a week.

The increasing cost of stamps and other USPS mailing services will be an additional expense for small businesses, many of which are already struggling with increasing costs in other areas of their business, such as energy and salaries. Small businesses should be aware of the date when the price hikes are expected to come into force, so they can factor in the additional costs accordingly.

Image: Depositphotos

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