Postal rate hike reflects increased service costs

by Amy Olson

For the first time in four years, the United States Postal Service is raising its rates for first-class mail.
The new rate, effective Sunday, raised the price of a first-class stamp from 32 to 33 cents for the first ounce. The last increase, in 1995, raised the price from 29 cents to 32 cents, while the rate increase before that — four years earlier — raised first-class stamp prices from 25 cents to 29 cents.
The postal service has been trying to stretch out the time between price increases, said customer relations coordinator Jim Ahlgren, who manages Minneapolis’ post offices.
He said the postal service sets the increase to reflect the rising cost of service. But he added that the rate is calculated so that the postal service just breaks even; it is the only government entity not supported by federal appropriations.
Ahlgren said the postal service delivers all mail within 500 miles by semi-trailer truck. The agency has to shell out an extra $1 million every time the cost of gas goes up a single cent per gallon, Ahlgren said.
Customers can still use the old 32-cent stamps if they also include an extra one-cent stamp. Ahlgren said area post offices have 80 million of the one-cent stamps featuring roosters. They will also carry approximately 245 million 33-cent transition stamps, which post offices will issue until the new 33-cent stamps are printed.
The postal rate increases are not across the board. Most standard letters weigh about one ounce. The heavier the letter, the higher the rate. The postal service delivers first-class letters weighing two ounces for 55 cents.
The two-ounce delivery rate will stay the same, while rates for letters weighing three to 13 ounces will actually drop. The 20-cent post card rate will remain the same.
The rate change is even more complex for other types of mail, like non-profit and bulk-rate mail, said Neil Grass, Addressing and Mailing Services manager. This makes it difficult for University offices and departments to estimate how much money should be added to each budget to cover the increased mailing costs.
Since much of the mail the office handles for delivery off campus is automated, Grass said the rate increase for presorted, nonprofit mail will be around 12 percent. Nationally, the postal service is telling customers they can expect a 20-percent increase, said Joe Giacomini, manager of the bulk mail processing plant in Eagan, Minn.
Grass said Addressing and Mailing Services handles about 12 million pieces of mail per year, and that is only a portion of the mail sent by faculty and staff at the University. It costs the office approximately $2.5 million each year. With the rate increases, he estimates an increase will cost an additional $200,000 each year.