In the face of a $20 million budget gap, the U.S. Postal Service has announced its second rate hike to take effect in 2014. The latest announcement, on Nov. 14, included shipping rates for its flat rate services. A retail flat rate, padded flat rate, and priority express legal flat rate envelopes will cost $19.99 beginning on January 26, so long as the Postal Regulatory Commission approves the rate hikes. The proposal will also raise priority express flat rate boxes to $44.95, and domestic priority flat rate shipping rates will start at $5.60. Currently, the U.S. Postal Service offers some of the lowest rates on the market, but these rate hikes will make their services on par with other shipping companies, including FedEx and UPS.
The Nov. 14 announcement comes on the heels of the announcement in September of this year that standard letter rates will go up by $0.03 to $0.49 per letter. Adding additional ounces to the weight of a standard letter is going to go up by $0.01 to $0.21. All letters destined for international locations will cost $1.15 each, and post cards are going up by $0.01 to $0.34 each.
Many businesses which depend on the Postal Service to ship merchandise to their stores are expecting to raise their prices in store to compensate for the higher shipping charges. However, many business owners will not automatically raise their prices on Jan. 26 when the new rates take effect, but will wait until they have to restock merchandise. Some business owners may consider alternate third-party or proprietary shipping methods.
The Governors of the Postal Service easily voted to approve the rate hike proposed in September in light of the precarious financial situation the Postal Service is in, according to Board of Governors Chairman Mickey Barnett.