In May, USPS applied for increases in the postage rates of first-class letters, postcards, newspapers, certified mail, and a few other services used by the Postal Regulatory Commission.
This request was approved and will take affect August 29th, 2021. Therefore, our direct mail clients will begin experiencing price adjustments for first-class mail, package services, and other special services offered through USPS. Please contact your account representative for any questions you may have regarding this update.
In addition to the increased postal rates, the state of Florida is listed as a potential state that will experience impacts from USPS’s effort to slow delivery standards. According to the Washington Post’s analysis of the USPS delivery changes, about 6 in 10 pieces of mail sent to Florida, Washington, Montana, Arizona, and Oregon will experience longer delivery times by approximately two days. According to USPS, “the plan is needed to cut costs while also delivering mail on time under more relaxed requirements.”
Please note, the Postal Regulatory Commission is said to not be in agreement with the USPS’s delivery plan. USPS said it is ”moving forward…but will review the regulator’s recommendations.”
Why is this happening?
According to USPS, “…the Postal Service’s cost profile and demand trends, including a decline of mail volume, a growing number of delivery points, and increased labor and retirement costs, are not like those of the average company. This is why the Postal Regulatory Commission (PRC) recognized that CPI must be adjusted to fit the price cap to the Postal Service.”
With the rise of digital advertising and online media, mail volume has decreased by 46 billion pieces (that’s 28%) during the last ten years and is continuing to shrink. Over the same time period, First-Class Mail volume has decreased by 32%, while single-piece First-Class Mail volume has decreased by 47%, including letters with postage stamps.
If approved, the rate changes will take effect at the end of August 2021.
Check out the price comparison breakdown below:
The proposed pricing increases would result in a 6.9% increase in overall Market Dominant goods and service prices. To compensate for lost revenue owing to First-Class Mail volume decreases, First-Class Mail prices would rise by 6.8%.
You may recall our blog piece about the worldwide paper shortage, which described worldwide industrial setbacks that have resulted in a global paper scarcity and price hikes. If you didn’t get a chance to, use this link here to read.
The rise in paper costs along with the rise in postage rates will likely have a big impact on businesses around the United States.
What’s Next for Solo Printing?
To avoid significant price changes for our clients, Solo Printing is monitoring the USPS’s request. By the end of June 2021, we should if these postage rate increases have been approved. In the meantime, we continue to highly encourage pre-planning on all jobs. Along with the shortages and price adjustments from paper mills, postage rate increases will also most likely affect the lead and turnaround times of print production. By pre-planning, our team is better able to find our clients suitable price points for postage rates and paper stock in supply.
If you have any questions, please contact your Solo Printing representative or use the Contact Us form below.