Forced USPS price reduction begins this weekend

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The United States Postal Service (USPS) will remove its ‘exigent surcharge’ for mailing services on Sunday (April 10) following a mandate put in place by the Postal Regulatory Commission (PRC).

The surcharge had been added to mailing products and services in January 2014 to help USPS recover US$4.6bn in losses resulting from the recession. The removal of the surcharge means that the post is now set to lose out on approximately US$2bn in annual revenue.

“Given our precarious financial condition and ongoing business needs, the price reduction required by the PRC exacerbates our losses,” said Megan J Brennan, Postmaster General and CEO of USPS. “This unfortunate decision heightens the importance of the review of our ratemaking system which our regulator is required to conduct later this year.  

“To properly compete for customers and continue to meet America’s evolving mailing and shipping needs, USPS needs the financial capability to invest in the future. We continue to seek legislative reforms to put the postal service back on a sustainable financial path, and pricing is an important component.”

The PRC is required to review the market-dominant regulatory system to determine whether it is achieving the statutory objectives mandated by Congress. The commission is empowered to modify the system or create a new system as necessary to achieve the objectives. The obligation to conduct the review arises 10 years after enactment of the Postal Accountability and Enhancement Act, which occurs in December 2016. USPS is seeking congressional action to reinstate and make the exigent surcharge permanent. 

The surcharge removal means these First Class Mail prices will be reduced to the following from April 10:

Letters (1oz) – US$0.49 to US$0.47 

Letters additional ounces – US$0.22 to US$0.21

Letters to all international destinations – US$1.20 to US$1.15

Postcards – US$0.35 to US$0.34

April 8, 2016

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Helen has worked for UKi Media & Events for nearly a decade. She joined the company as assistant editor on Passenger Terminal World and since progressed to become editor of five publications, covering everything from aviation, logistics and e-commerce to meteorology. She has a love for travel and property and has redeveloped three houses in three years. When she’s not editing magazines, she’s running around after her two boys and their partner in crime, Pete the pug.

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