US Postal Service looks to trim costs

Published 10:57 am Monday, July 12, 2010

Changes may be on the way for customers of the United States Postal Service.

In an effort to reduce a projected multi-billion dollar shortfall, the Postal Regulatory Commission was scheduled to meet on Monday where they are expected to debate several cost-cutting measures, including trimming the mail delivery week from six days to five. News media sources are indicating that Saturday mail delivery may be axed from the Postal Service’s normal schedule. That move, if approved, is projected to save $3 billion per year.

Additionally, the United States Postal Service announced last week it had requested a price increase on many items, including the cost of a first class stamp, which would move from 44 cents to 46 cents. The Postal Regulatory Commission will also take that request under consideration.

The Commission has 90 days to either accept or reject any proposal. Those accepted must then be approved by the U.S. Congress.

In a press release, the Postal Service said the increases were needed to help close a projected $7 billion projected shortfall in fiscal year 2011. The rate increases, according to the postal service, would be combined with additional spending cuts.

The proposed price changes, which would affect everything from first-class letters to postcards, are expected to generate $2.3 billion for the final three quarters of fiscal year 2011 (January to September and an estimated $3 billion for the full 12 months of fiscal year 2012.

In addition to the change in first-class postage, other changes could include: an increase in first-class mail postcard prices from 28 cents to 30 cents; an 8-percent increase for periodicals; a 5.1-percent increase for catalogs and a 23-percent increase in the rate for standard mail parcels.

The service has continued to battle losses in business tied to the public’s transition to electronic services such as email and online bill paying, which has removed mail from the service.

The affects of digital changes and a sluggish economy have also forced the Postal Service to make this request for a rate increase. This change, in particular, represents a departure for the Postal Service.

It is expected the changes would go into effect Jan. 2.

Also announced Tuesday was the plan to begin sales of a new Forever Stamp, beginning in October.

The Holiday Evergreen Forever Stamps would be sold at the current rate of 44 cents and would hold their value “forever.”