The U.S. Postal Service (USPS) requested and received a record hike for the price of stamps as it posts yet another year of losses.
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During the 2018 fiscal year, the Postal Service recorded a net loss of $3.9 billion, which is an increase of more than $1 billion over the losses it suffered in 2017. Overall volume declined by 3.2 billion pieces, which includes a 3.6 percent decline in first-class mail volume – its main source of revenue.
Part of the agency’s problem is worker compensation and retiree health benefit costs, which increased by more than $800 million and $221 million, respectively, during the most recent fiscal year.
The Postal Service was unable to pay $6.9 billion it owes the federal government to prefund pensions and health benefits for workers, as has been the case for several years. It has more than $120 billion in debt and unfunded liabilities.
The last time the agency recorded a profit was more than a decade ago. The White House said the service has lost $65 billion since the financial crisis.
In order to offset some losses, the Postal Service proposed a slew of price increases that were approved on Wednesday by the Postal Regulatory Commission – slated to take effect in 2019. Priority Mail Express prices will rise by 3.9 percent, while Priority Mail will increase 5.9 percent – those prices aren’t adjusted in line with inflation, but rather with perceived market conditions. First-class mail prices will rise by 10 percent.
The price of a “Forever” stamp is set to rise by 5 cents to 55 cents, a 10 percent and record nominal price adjustment. The price to ship a small flat-rate box will increase to $7.90, from $7.20, while a large flat-rate box will rise by more than $1 to $19.95.
“The [U.S. Postal Service Board of] Governors believe these new rates will keep the Postal Service competitive while providing the agency with needed revenue,” the Postal Service said in a statement.
The Trump administration has put pressure on the service to address its financial woes. President Trump has personally lashed out at the courier on a number of occasions, specifically over a shipping deal it cut with e-commerce giant Amazon. The Postal Service also faces mounting competition from companies, like Amazon, developing their own delivery services, as well as from FedEx and UPS.
Trump issued an executive order in April that created a task force to study the post office and its business model, which Trump said needs to be restructured to prevent a “taxpayer-funded bailout.” Meanwhile, the Office of Management and Budget released a wide-ranging set of proposals in June to boost government efficiency and accountability, including privatizing the Postal Service.
One bright spot during the 2018 fiscal year was the federal mail courier’s shipping and packages segment, where revenue climbed by $2 billion – or 10 percent.
During the approaching holiday season, the mail courier expects to deliver about 15 billion pieces of mail and 900 million packages. It's busiest time will be the two weeks leading up to Christmas, the Postal Service said.
This article has been updated.