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Postage Rate Increases May 14

By Frank Ruggiero

Boone Mountain Times

10 May, 2007

Once again, it’s time for the two-cent stamps to shine.

Come Monday, May 14, the U.S. Postal Service will increase the first-class postage rate from 39 to 41 cents, making those leftover two-cent stamps all the more useful.

According to Boone postmaster Lee Montgomery, 41-cent stamps are already available in limited quantities, but the local post office will be fully stocked Saturday.

The last increase, from 37 to 39 cents, happened last year, though it was not necessarily a USPS decision. Carl Walton, USPS communications coordinator of the Greensboro district, which includes Watauga County, said the service was required by the federal government to provide escrow payment for military retirement benefits, thus increasing the rate.

Typically, rates are increased to offset processing costs, as was the case five years ago, when the first-class rate was increased from 34 to 37 cents, Walton explained. This year’s increase comes amid a couple other changes at the postal service.

“There are three main focuses,” Walton said. “One is the first class rate increase and the second is a new release we’re introducing called the ‘Forever Stamp.’”

The Forever Stamp, which bears an image of the Liberty Bell, can essentially be forever useful in terms of first-class postage, regardless of future rate hikes. Plus, a forever stamp will cost the current first-class postage rate at the time.

“So, it’ll be good for first-class postage forever,” Walton said. “For instance, if you buy 100 of them now, use 50 of them and put another 50 away, the stamp will still be good many years from now, and you don’t have to put an additional two or three cents on there.”

Once the first-class rate increases, Forever Stamps will be priced as such.

“This will represent a savings for [customers],” Walton said. “The whole purpose behind that is to find ways to make things more convenient for the customer, and this is an idea that came out and seemed to work.”

The third change proves that “shape matters,” in terms of shape-based pricing. While the current pricing structure is based on weight, shape-based pricing is dependent on weight and shape.

A USPS press release explains that the service currently does not distinguish between letters, large envelopes known as “flats,” and parcels. For first-class mail, a single-piece price is 63 cents to mail a two-ounce letter, two-ounce flat and a two-ounce parcel.

“So, it costs more for us to process that,” Walton said. “We’ve actually kind of lost money over the years doing it like that. This way, we’re basing it on shape, so it’s commensorate with the cost of processing that mail.”

The new rates take into account the items’ shapes, all of which have “substantially different processing costs and therefore now have different prices,” the release states.

The system can prove advantageous for customers in terms of savings, as well. For instance, if the contents of a first-class, two-ounce flat can be folded and placed in a letter-sized envelope, the customer can reduce postage by as much as 39 cents per piece, the release says.

“These are ways to encourage our customers to present their mail in a way that’s cheaper to get through the system and cheaper for us to process, thus cheaper the cost,” Walton said.

The same process can be applied to parcels. If the contents of a first-class, six-ounce parcel can be placed in a flat, rather than a package, the customer saves 33 cents.

“We realize that not all mailers will be able to reconfigure their mail this way — and some may not want to for various reasons,” the release says. “But for those that can and want to, this is a good way for them to mitigate the price increases.”

In that regard, the USPS is reducing the additional ounce rate, so when items are heavier, the additional ounce price declines. According to the release, for letters weighing more than an ounce, the new prices are actually lower than the old. For instance, a two-ounce letter that currently costs 63 cents would be reduced to 58 cents under the new rates.

Walton acknowledged that the rate increase tends to draw more attention than other costs affected by inflation.

“The funny thing about stamps is when the rate goes up, everybody knows about it, so it becomes an issue and all that,” he said. “Then again, it’s not a national issue when the price of tuna fish goes up. We usually stay below the rate of inflation, so we’re right there, but any time costs go up, people will have an issue with it