The price of a First Class stamp would rise 10 percent, from 50 cents to 55 cents, and other classes of mail heavily used by nonprofits would see price hikes next year that are twice the rate of inflation under a proposal by the United States Postal Service (USPS).
The USPS yesterday filed a rate increase proposal with the Postal Regulatory Commission (PRC), which will review and approve any proposed prices before the scheduled Jan. 27, 2019 implementation date.
Proposed prices would increase Mailing Services product prices about 2.5 percent and most of the price increases for Shipping Services will vary by product, with Priority Mail increasing 5.9 percent, and Priority Mail Expenses rising 3.9 percent.
Mailing Services price increases are limited based on the Consumer Price Index (CPI). Shipping Services are adjusted strategically, according to "market conditions and the need to maintain affordable services for customers."
According to the Alliance of Nonprofit Mailers (ANM), using the CPI-U calculated by the PRC plus some unused rates capacity, USPS proposes average increases by class of mail as follows:
- First Class Mail, 2.486 percent;
- Marketing Mail, 2.479 percent;
- Periodicals, 2.52 percent;
- Package Services, 2.522 percent; and,
- Special Services, 2.512 percent.
"The most surprising and shocking development" is the proposed 10-percent increase in the cost of a First Class stamp, said Stephen Kearney, executive director of the ANM. "That is so important to nonprofit fundraising. Nonprofits and their agencies will need to quickly review their mailing budgets for next year," he said, adding that many include First Class postage on response envelopes and many use First Class on outbound appeals.
Heavily used categories of outbound nonprofit marketing mail are going up twice the rate of inflation, 4.8 percent to 5.5 percent for destination sectional center facility (DSCF), according to Kearney. Single piece First Class is going up four times the rate of inflation. "That's a double hit for some fundraisers," he said.
"The Postal Service is attacking a sector of mail users who are trying as much as possible to stay in the mail, while giving a sector trying to leave the mail a big break," Kearney said, pointing to banks, credit card and insurance companies that will have a 1-percent increase in presorted First Class. "We all know these financial companies are pushing online billing and payment with heavy advertising and incentives," he said.
Just as it has done in the last two years, USPS will reduce workshare discounts on drop-shipped Marketing Mail letters and making differential changes in flats versus letters, Kearney said.
The USPS is soliciting comments until Oct. 22 on another proposal that would limit all Marketing Mail, regular and nonprofit, to content that is only paper-based or printed material, with no merchandise or goods allowed of any type, which would impact nonprofits that use fundraising premiums, such as blankets or other trinkets.