In January 2002, the cost to mail a one ounce, first class letter rose from 33 to 34 cents, a modest three percent increase. Other mailing services also saw a jump in price, including a 10 percent rise for second class, also referred to as periodicals. Just six months later, on June 30, postage rates rose yet again, this time with first class up almost eight percent, from 34 to 37 cents, priority mail rocketing 13.5 percent, express mail climbing 9.4 percent, and second class again increasing by 10 percent. This latest round of hikes is the largest in a round of three increases in the past 18 months.
According to reports, the U.S. Postal Service (USPS) expects a net loss of $1.5 billion this fiscal year, which ends in September, its third consecutive year of losses. They state that with a drop in mail volume by almost three billion pieces between September and November 2001, and increased fuel, security, and personnel costs, raising rates is imperative to the survival of the service, which receives no tax money.
Most businesses faced with a financial crunch usually tighten their belt, cut back on unneeded expenses, and compete more vigorously by offering a better product and improved customer service. Resorting to simply raising prices usually forces customers to take their business elsewhere, which is what some postal patrons are beginning to do, such as using faxes, e-mail, and on-line bill paying. Ultimately, though, there really is no other choice for mail delivery except the USPS.
While the USPS does provide a much needed and valuable service, especially when delivering Render to our readers, they are too quick to turn to raising rates as a solution to survival. After all, three rate hikes in the past 18 months hasn’t stopped the financial bleeding yet, and until the USPS takes the same cost cutting measures as other businesses do to be competitive, the tourniquet will only tighten.
August 2002 Render