The U.S. Postal Service hopes to raise rates on most classes of mail on June 30th. The independent Postal Rate Commission is scheduled to announce a decision today on a proposal including an increase in first-class rates by 3 cents to 37 cents. Priority mail would remain at $3.95 for a 2 pound package for zones local, 1, 2 and 3, but would rise according to distance for zones 4 through 8. (A 2 pound package going to zone 8 would cost $5.75.) Currently a 2 pound package costs $3.95 going to all zones, with distance-based rates starting at packages weighing over 5 pounds.
Online auction sellers would be adversely affected by the rate increase, as buyers may balk at the higher costs of Priority Mail, a popular method of sending auction items.
Due to financial difficulties, the USPS halted new building projects last year and eliminated more than 12,000 jobs. The agency had reached a settlement agreement with 56 out of 62 participants in the pending postal rate case at the Postal Rate Commission (Docket No. R2001-1). When the current proposals were filed by the Postal Service, rates were not expected to increase prior to September 2002. Parties agreeing to settle include major customers and trade associations, as well as competitors. Only one party, the American Postal Workers Union (APWU), opposed the settlement agreement.
The Board of Governors approved the filing of the omnibus rate case just before the terrorist attacks on September 11 and the subsequent anthrax mailings. The independent Rate Commission suggested settling the case in light of those events, which have combined with a slowing economy to produce a negative impact on the Postal Service’s bottom line.
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