The price hike is designed to cover operating costs at the post office. Customers saw the last rate increase just a little over a year ago, but postal service representatives say that money didn't help the operating budget. Instead, it went into a congress-mandated escrow account.
Mike Cannone, United States Postal Service : The rate increase of January 2006 didn't go to postal operations. It didn't cover any of our costs. So healthcare expenses and the cost of fuel are just two examples of how our costs are rising. And that's what this rate increase is going to cover.
Soaring gas prices are a major factor in the call for a rate increase. Cannone says for every penny per gallon increase in gas prices, it costs the post office $8 million in overhead costs.
Another big difference about this rate change is that it's based on the shape of the mail -- not just the weight. This means you can actually save money with a little planning.
Cannone : The thing consumers need to know, whether they're business mailers or individual users of the mail, if you can make your mail piece letter-size, instead of flat or oversized, and keep it under a quarter of an inch, you're going to actually save money over what you were paying before today.
At this mail processing center near Rancho Bernardo, machines sort 33,000 pieces of letter-sized mail every hour. But larger pieces move much more slowly and require more human labor. This makes sorting these items more expensive.
To soften the blow of the rate increase, the post office is offering a new ‘forever stamp’ that will lock-in the current stamp price. They cost 41-cents now, but could be worth more to you later -- as long as you stock up before the next rate increase.
Cannone : Let's say rates go up in three years. That forever stamp will then convert to the new rate of postage. But if you have the ones we're selling now for 41 cents in your possession, that will still be good for the first rate of postage. That's why it's attractive to folks.
Postal Service officials say consumers can expect similar rate increases every three-to-five years.
