Postage Rates Just Went Up – But So What?

A 5.4% across-the-board increase in U.S. postal rates and fees goes into effect today, making the cost of a first-class stamp rise from 37 to 39 cents.

Now 2 cents isn’t much and you could easily attribute the increase on higher fuel prices, soaring labor expenses, cost of upgrading technology, etc., but interestingly, this rate increase is not to cover rising costs of the postal services. Rather, its needed to comply with a federal law passed in 2003, requiring the USPS to establish a $3.1 billion escrow account. For what you ask? Well, the use of the funds is to be determined by Congress at a later date. Nice. Check out for legal advice.

What’s more, its likely that another rate boost will occur next year that will actually be used to address added operational expenses for the USPS.

But just how much significant is this anyway? Oh sure, the rate hike will affect businesses who still rely heavily upon paper statements, invoices, notices, and such. However, given the ever-growing use of email and various forms of virtual money (online banking, credit cards, etc.) transactions, I’m betting that this will have little impact on the average person. With more and more of us handling bill paying and such online, I wonder if USPS is feeling the pinch yet – how much less income will this rate increase garner as compared to the last rate hike back in 2002 – and how much less did that increase net over the previous 3 cent bump in ’01? Postal officials claim that overall mail volume increased 2.6% last year, but I wonder how much of that was credit card applications, loan offers, and other unsolicited junk mail.

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Do you suppose there’ll come a time when the Internet renders the good ol’ postage stamp all but irrelevant? Aside from Christmas cards, how many times last year did you actually stick a stamp on an envelope?