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Jarrett Streebin

2014 Postal Rate Increase - What You Need to Know

by Jarrett Streebin

In a recent press release, the USPS announced that, as of January 26, 2014, there will be a postal mail rate increase to recoup some of the losses suffered as a result of the recent recession. According to the Postal Service, this rate increase will last less than two years, at which point most of their losses will be made up for.

Generally, the USPS increases prices based on the Consumer Price Index (CPI) to reflect the rising (or falling) cost of real goods and services. This CPI rate adjustment traditionally ranges between 1-3%. For 2014, the CPI adjustment will be 1.6%, though the overall adjustment will be much larger due to the exigent price hike. The additional rate increase adds an additional 4.3%, for a total increase of 5.9%. The breakdown of the pricing adjustment can be seen below:

  • Letters (1 oz.) — 3-cent increase to 49 cents
  • Letters additional ounces — 1-cent increase to 21 cents
  • Letters to all international destinations (1 oz.) — $1.15
  • Postcards — 1-cent increase to 34 cents

This hike is expected to generate $2 billion of new revenue to improve the Postal Service's financial situation. For the 2013 fiscal year, the USPS reported a $5 billion loss - a marked improvement over the $15.9 billion loss they reported in 2012. In 2013, they saw their first growth in revenue since 2008 when the recession hit. Most of this was due to the increased package volume, which grew 8% in 2013. The jury is out as to whether their Sunday delivery deal with Amazon will further increase this number in 2014.

Either way, be prepared to pay slightly more this year when shipping packages via USPS. If you're looking to integrate with other carriers to avoid this rate increase, you can do so easily with EasyPost's simple shipping integration.