Post Office Readies Rate Increase
WASHINGTON (AP) - Major mailers expect the Postal Service's governing board to give the go-ahead this week to seeking an increase in the price of stamps in a year or so.
''I think it's about 95 percent likely that the governors will approve a filing'' when they meet Tuesday, said Neal Denton of the Alliance of Nonprofit Mailers.
''They're going to do it,'' agreed Gene Del Polito, president of the American Association for Postal Commerce, formerly the Advertising Mail Marketing Association. Officials of the Mailers Council and Direct Marketing Association concurred that action was likely soon.
Postal officials were not discussing how much of an increase would be sought - or even if a request would be filed - stressing that the decision is up to the governing board.
Citing rising expenses, two of the post office's main competitors in the delivery business - Federal Express and United Parcel Service - recently announced rate increases to take effect in February.
Just last month, postal officials declared their rates would not be raised in 2000, noting the $363 million profit for fiscal 1999, which ended Sept. 30. However, that was the lowest in five years and the agency, like its competitors, faces rising fuel and wage costs.
When the Postal Service wants to raise prices, it must seek permission from the independent Postal Rate Commission and provide detailed supporting documents. The commission then holds hearings and issues its decision; the process takes 10 months.
Assuming commission approval, the matter would go before the postal Board of Governors in November or December. The board traditionally has been reluctant to impose higher rates before the Christmas mailing rush, so any rate rise is unlikely before early 2001.
The current 33-cent First Class rate took effect Jan. 10, 1999, a 1-cent increase. Speculation in the mailing industry has focused on a probable First Class increase of 1 or 2 cents this time.
Postmaster General William Henderson recently told The Denver Post he would not recommend a rate increase larger than inflation, which would suggest a 1-cent boost.
The Postal Service is a semi-independent federal agency. It does not receive tax money for operations and is expected to make enough money to break even over time. The agency still carries a $3.5 billion accumulated deficit, built up over many years of operating in the red.
While the First Class rate for letters and postcards is the most visible change for the public, rates also would rise for most other types of mail. ''One of the things a rate case is, is civil war,'' Denton said, '' with each different mailing interest trying to carve up the pie as to who should pay what in increased rates.''
Denton of the Alliance of Nonprofit Mailers pointed to the impact on small, community-based nonprofit organizations that need low rates to raise funds for their activities. He speculated that increases for some small nonprofits could reach 15 percent.
Del Polito of the postal commerce group said it is his ''expectation that flat-size mail is probably going to come in for a disproportionately larger increase, which means publications are going to be hurting.''
''This is not a very propitious time for an increase,'' Del Polito said, citing the growth in Internet commerce that offers alternatives to the Postal Service.
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