Increasing USPS rates means businesses need cheaper ways to ship

August 29 2013

The financial struggle of the United Stated Postal Services has been well documented. It was reported earlier this month that the organization lost $750 million in the third quarter, which increases its total yearly losses to $3.9 billion. While there are several different changes in the works—eliminating Saturday and curbside delivery, along with alcohol shipments, and reworking the prepaid pension plan—it is still too early to know if these efforts will actually generate the revenue that is needed to right the ship.

It is for this reason that many private sector groups are afraid that the next steps by the USPS could be a broad rate increase in the coming months—something that will be discussed at a private meeting on September 5. Doing so would cause a number of companies that rely on mail service to start looking for alternative ways to ship—if they are not doing so already.

A recent article from The Hill spoke with several of these industry leaders to figure out where the true problem lies. The overall feeling is that they understand the corner that the organization's board of governors has been backed into, but an increase of rates would ultimately be a poor long-term decision. "The Internet and mobile technology have become, and will continue to be, the drivers of diminishing communications by paper," the Affordable Mail Alliance, a coalition of nonprofits, businesses and other groups, wrote to the board last week. "As a result, previously accepted views that the mail is price insensitive are no longer appropriate."

A 2006 law allows the USPS to raise prices on stamps to match the rate of inflation, but no further, barring an extraordinary circumstance. The governors attempted to increase rates in 2010 but were denied, and it looks like they could be trying to do so again. Mailing industry officials are stating that they are not facing the "exceptional circumstances" that would justify this kind of increase.

"The only way to prevent USPS from soaking its customers with rate increases or taxpayers with subsidies is to pass comprehensive reform legislation that allows it to adapt to America's changing use of mail," House Oversight Committee Chairman Darrell Issa told The Hill.

However the next few months play out, companies would be wise to start exploring alternative options when it comes to shipping. A local courier service, for example, can handle all immediate needs and ensure packages and important documents reach their destination securely.