Late Tuesday the USPS had planned to file an exigent rate case with the Postal Regulatory Commission (PRC). Overall, the planned postage rate increase will average 5.6%. Implementation of the increased postage rates is planned for January 2, 2011.

First Class:
First-Class Mail will rise 5.4% on average. The price for retail letters and cards will increase two cents each; presorted letter prices will increase an average of 2.1 cents, with no change in the additional ounce rate. FCM presorted flats will jump about 12%, on average, while a new rate band for FCM parcels will apply the same price through three ounces.

Standard (Regular and Nonprofit):
Standard Mail prices will increase an average of 5.6%. The increase for letters and flats will be about 5.0% and 5.1%, respectively, while Carrier Route will go up 4.9%, and High Density/Saturation letters and flats/parcels will increase by 4.8% and 4.4%, respectively. Parcels will jump 23.3% (they currently do not cover their costs.) Other classification changes will be proposed as well.

Other:
Periodicals will increase by 8%, less than enough to move them to profitability. Package Services will increase 7%, except for BPM flats that will rise only 5%. Special Services will go up an average of 5.2%.

The Postal Service acknowledges the price increase will impact customers, but expects the total net benefit of the higher prices to be about $2.3 billion, an amount that will reduce the agency's anticipated FY2011 loss to about $4.7 billion.

The formal filing will be later this afternoon, and the PRC has 90 days to respond (i.e., by October 4). More information will be conveyed as it becomes available.

Sincerely,

Ken Wartman, CEO