Who says April is the cruelest month? April 10 will bring a postage price reduction for mailers and consumers. The U.S. Postal Service will roll back prices on many of its products by an average 4.3 percent.
This reduction is known as the exigency rollback and is a result of the Postal Service hitting the revenue threshold of $4.6 billion it is allowed to generate under the exigent price increase that took effect 2 years ago. The surcharge removal means the price of sending a 1-ounce First-Class Mail letter will fall to 47 cents from 49 cents. In a Feb. 25 news release, the Postal Service said this mandatory price reduction will worsen its financial condition by reducing revenue and increasing net losses by about $2 billion per year.
As you may recall, in 2013, the Postal Service filed for a rate increase on its market-dominant products above the standard inflation-based price cap. The Postal Service claimed that the Great Recession of 2008 hurt mail volumes sufficiently to constitute an “exceptional or extraordinary circumstance.” The law governing the Postal Service only allows it to seek a rate increase on market-dominant products (such as First-Class Mail, magazines, and advertising mail) above the inflation-based price cap for extraordinary or exceptional circumstances.
The Postal Regulatory Commission agreed to an increase, but only a temporary one. Once the Postal Service recovered the revenue lost to the recession – calculated at $4.6 billion – it would have to lift the surcharge and roll back prices to pre-exigent levels. The Postal Service expects to hit that threshold April 10. So market-dominant prices will drop, unless Congress enacts postal legislation that makes the exigent rates permanent, or the federal appeals court issues a ruling favorable to the Postal Service.
Do you expect to wait to purchase forever stamps until after April 10? Business mailers, do you anticipate sending more mail than initially planned this year once prices decrease?