Is There Light at the End of the Postal Tunnel?

Here’s how that affects you. First, expect a postage change in late spring or early summer of 2008. For Standard mail, First Class mail and single-piece parcels, the average increase by class will be limited to the consumer price index (CPI). Currently the CPI change is between 2 percent and 3 percent, but mailers should expect an average 3 percent postage increase. Not every mailer will receive the average increase, however, because the new law allows the USPS to differentiate among mail within each class. Fortunately, the CPI cap acts as a moderator of postal rate shifts within classes of mail. For example, flat-shaped mail comprises 25 percent of the volume of Standard mail and 34 percent of the revenue. With a 3 percent rate cap, the USPS couldn’t raise the flat-shaped mail rate by 20 percent without dramatic decreases in the rest of Standard Mail.