US Postal Service Raising Shipping Rates, Service Fees
(Crystal A. Proxmire, Dec. 30, 2015)
Washington, DC – The price of first class stamps will stay the same, but the costs of shipping and other services offered though the United States Postal Service (USPS) are going up.
The increases, approved in October, begin Jan. 17, 2016.
The new rates put the USPS in compliance with the Postal Accountability and Enhancement Act of 2006. In 1970 President Richard Nixon signed the Postal Reorganization Act of 1970 following the US Postal Strike of 1970. This created the Postal Regulatory Commission to give the Executive Branch more oversight powers.
The Postal Accountability and Enhancement Act of 2006, signed by President George W. Bush, increased the powers of the commission and reduced the ability for the USPS to offer subsidized services.
According to sources collected for Wikipedia, “One stipulation of the PAEA has caused controversy. It stipulates that the USPS is to make payments of $5.4 – $5.8 billion into the Postal Service Retiree Health Benefits Fund, each year, from 2007 to 2016 in order to pre-fund 50 years of estimated costs.
“This requirement also explicitly stated that the USPS was to stop using its savings to reduce postal debt, which was stipulated in Postal Civil Service Retirement System Funding Reform Act of 2003.^[4] This is in addition to deductions from pay for federal contribution to social services.^[5]”
The cost of meeting all of the requirements is passed on to the public who use the services.
Below are the increases, taken from the Oct. 16, 2015 decision…
Domestic Products
Priority Mail Express
Overall, the Priority Mail Express price change represents a 15.6 percent increase. The existing structure of zoned Retail, Commercial Base, and Commercial Plus price categories is maintained. However, the Priority Mail Express Flat Rate Box will be eliminated because of insufficient volumes.
Retail prices will increase an average of 14.4 percent. The price for the Retail Flat Rate Envelope, Padded Flat Rate Envelope, and Legal Flat Rate Envelope, a significant portion of all Priority Mail Express volume, is increasing to $22.95.
The Commercial Base price category offers lower prices to customers who use online and other authorized postage payment methods. The Commercial Base prices will increase 17.7 percent on average. Commercial Base prices will be set at a flat 10 percent discount off of Retail prices.
The Commercial Plus price category has traditionally offered even lower prices to large volume customers. New for January, Commercial Plus prices as a whole will receive a 48.2 percent increase in order to match these prices to Commercial Base. The Postal Service’s long term goal is to eliminate the Commercial Plus category at some point in 2017 to reflect the industry standard of publishing only one set of commercial rate tables. Deeper discounting may still be made available to customers through negotiated service agreements.
Priority Mail
On average, the Priority Mail prices will be increased by 9.8 percent. The existing structure of Priority Mail Retail, Commercial Base, and Commercial Plus price categories is maintained. However, the Regional Rate Box C and Critical Mail will both be eliminated because of low customer usage.
Retail prices will increase an average of 8.6 percent. Retail Flat Rate Box prices will be:
Small, $6.80; Medium, $13.45; Large, $18.75; and Large APO/FPO/DPO, $16.75. The regular Flat Rate Envelope will be priced at $6.45, with the Legal Size and Padded Flat
Rate Envelopes priced at $6.45 and $6.80, respectively.
The Commercial Base price category offers lower prices to customers using authorized postage payment methods. The Commercial Base prices will increase 9.4 percent on average. Commercial Base prices will be set at a 13.9 percent discount off of Retail prices.
The Commercial Plus price category has traditionally offered even lower prices to large volume customers. New for January, Commercial Plus prices as a whole will receive a 13.3 percent increase in order to bring these prices within three percent of Commercial Base prices. The Postal Service’s long term goal is to eliminate the Commercial Plus category at some point in 2017 to reflect the industry standard of publishing only one set of commercial rate tables. Deeper discounting may still be made available to customers through negotiated service agreements.
Parcel Select
On average, prices for non-Lightweight Parcel Select, the Postal Service’s bulk ground shipping product, will increase 3.1 percent. For destination entered parcels, the average price increase is 4.9 percent. For non-destination entered parcels, the average price increase is 1.9 percent. Prices for Parcel Select Lightweight will increase by 23.5 percent. Parcel Select Non presort will be re-branded as Parcel Select Ground, and will see a 1.9 percent price increase. Finally, the Parcel Select Origin Network Distribution Center (ONDC) Presort and Network Distribution Center (NOC) Presort price categories will be eliminated because of low customer demand, and in order to simplify product offerings.
Parcel Return Service
Parcel Return Service prices will have an overall price increase of 5.0 percent. Prices for parcels retrieved at a return Sectional Center Facility (RSCF) will increase by 5.0 percent, and prices for parcels picked up at a return delivery unit (RDU) will increase 5.0 percent. Return Network Distribution Center (RNDC) pricing will be eliminated because of low customer demand, and in order to simplify product offerings.
First-Class Package Service
First-Class Package Service continues to be positioned as a lightweight (less than one pound) offering used by businesses for fulfillment purposes. Overall, First-Class Package Service prices will increase 12.8 percent. To simplify the First-Class Package Service product, the 3-digit, 5-digit, and ADC presort levels will be eliminated. The 14, 15, and 15.999 ounce offerings that are currently only available as Commercial Plus will be consolidated into the Commercial Base price category, allowing the Commercial Plus price category to be eliminated, thereby streamlining the First-Class Package Service offering.
Standard Post, Renamed Retail Ground
Standard Post will be renamed Retail Ground beginning in January 2016, and prices will increase 10.0 percent. Customers shipping in Zones 1-4 will continue to receive Priority Mail service and will only default to Retail Ground if the item contains hazardous material or is otherwise not permitted to travel by air transportation.
Domestic Extra Services
Premium Forwarding Service prices will increase 3.6 percent in 2016. The retail counter enrollment fee will increase to $18.65. The online enrollment option, introduced in 2014, will now be available for $17.10. The weekly reshipment fee will increase to $18.65.
Prices for Adult Signature service will increase to $5. 70 for the basic service and $5.95 for the person-specific service. Adult Signature service for First-Class Mall will be limited to parcels only, to match current practice. Address Enhancement Service prices will be increasing between 1.9 and 7 .1 percent depending on the particular rate element, to ensure adequate cost coverage. Competitive Post Office Box price ranges will be modified for 2016 for the first time, and prices will be increasing 3.5 percent on average, which is within the new price ranges. Package Intercept Service will increase 3.3 percent, to $12.55. The Pickup on demand fee will remain unchanged for 2016.
International Products
Expedited Services
International expedited services include Global Express Guaranteed (GXG) and Priority Mail Express International (PMEI). Overall, GXG prices will rise by 7 .1 percent, and PMEI will be subject to an overall 11.6 percent increase. Commercial Plus prices will be equivalent to Commercial Base; however, deeper discounting may still be made available to customers through negotiated service agreements. In addition, prices for PMEI Flat Rate Envelopes will be further separated into additional country groups.
PMEI Flat Rate Boxes will be eliminated to be consistent with the elimination of the Priority Mail Express Flat Rate Box, and since it has low customer usage.
Priority Mail International
The overall increase for Priority Mail International (PMI) will be 10.2 percent.
Commercial Plus prices will be equivalent to Commercial Base; however, deeper discounting may still be made available to customers through negotiated service agreements. In addition, prices for PMI flat rate envelopes and boxes will be further separated into additional country groups. Insurance will also be offered up to $200 for merchandise and $100 for documents in lieu of weight-based indemnity available under current international exchanges. A fee is also being established for the International
Service Center (ISC) zone chart that is used to determine the applicable Origin Zone for
PMI pieces destined to Canada. The PMI Regional Rate Box C will no longer be available for PMI Regional Rate Boxes Contracts or PMI Regional Rate Boxes – Non-published Rates Contracts, to be consistent with the elimination of the Priority Mail Regional Rate Box C, and since it has low customer usage.
International Priority Airmail and International Surface Air Lift
Published prices for International Priority Airmail (1PA) and International Surface Air Lift(ISAL) will increase by 4.2 percent for IPA and 3.5 percent for IPA M-Bags, as well as6.3 percent for ISAL and 5.3 percent for ISAL M-Bags.
Airmail M-Bags
The published prices for Airmail M-Bags will increase by 9.2 percent.
First-Class Package International Service TM
The overall increase for First-Class Package International Service (FCPIS) prices will be 21.6 percent. Commercial Plus prices will be equivalent to Commercial Base; however, deeper discounting will still be made available to customers through negotiated service agreements.
International Ancillary Services and Special Services
Prices for several international ancillary services will be increased. International Postal Money Orders will increase by 5.6 percent. The International Money Order Inquiry Fee will increase by 3.5 percent. The International Money Transfer Service will increase between 3.3 to 3. 7 percent, depending on the rate cell.
ORDER
The changes in prices and classes set forth herein shall be effective at 12:01 AM. on January 17, 2016. We direct the Secretary to have this decision published in the Federal Register in accordance with 39 U.S.C. § 3632(b)(2). We also direct management to file with the Postal Regulatory Commission appropriate notice of these changes.
For more details on postal rates and classification changes see http://www.prc.gov/docs/93/93564/Notice%20CP2016-9.pdf.