The Governors of the Postal Service voted Monday to accept the Postal Rate Commission's recommendations to increase postage rates. The new rates will go into effect on June 30 of this year. Priority Mail will increase by an overall average of 13.5 percent, with a new one-pound flat rate of $3.85, up from $3.50. Postage for heavier pieces will vary by zone. Currently, Priority Mail rates are not zoned for pieces weighing up to 5 pounds. Delivery Confirmation for Priority Mail will increase from 40 cents to 45 cents.

Many smaller online auction sellers prefer Priority Mail so they don't have to pay for packaging (Priority Mail packaging is available for free from the post office). Priority Mail also allows them to offer customers quick delivery, and they can obtain confirmation that a package was delivered for an additional charge. Sellers are also concerned that buyers will factor in increased costs when buying on auction sites, since buyers typically pay for shipping costs.

First-class stamps will also rise on June 30, increasing from the current 34 cent rate to 37 cents. New non-denominated U.S. Flag and Antique Toys stamps, plus a three-cent "make-up rate" Star stamp, will be available in mid-June. The cost of the second ounce remains the same at 23 cents, boosting the rate of a two-ounce letter from 57 cents to 60 cents. Customers who mail First-Class Mail parcels will now be able to buy Delivery Confirmation or Signature Confirmation. Post cards will cost 23 cents, up from the current 21-cent rate.

"We are committed to maintain this rate schedule at least until calendar year 2004," stated Postmaster General John Potter at this week's USPS Board of Governors meeting. Complete rate information is available on the Postal Service Web site, http://www.usps.com/ratecase.

The USPS announced a Transformation Plan at the National Press Club in Washington, DC, last week. The plan outlines strategies USPS can follow under current law, examines moderate legislative reform in key areas such as pricing flexibility and presents long-term options to maintain universal service. The USPS is in favor of a new model of operations, called a Commercial Government Enterprise (CGE). The CGE would be a government-owned entity, but one that enjoys some of the operational and financial flexibility found in the private sector. Under the CGE, the Postal Service would set rates independently.