Why Are Postal Rates Always Rising?
As you know, in May of 2007, US postal rates jumped 2 cents for a first class letter. In May of 2008, rates are climbing another 1 cent. Why the increase? There are numerous reasons. With the rising cost of gasoline, it costs more to move the mail from its origin to its delivery point. There is not much we can do about that. However, there are some effective methods that many postal customers can employ to battle rising postal rates.
Method #1. Online Bill Payments
With the internet, many people are now paying bills online. I do it myself. It saves me a stamp, plus I don't have to write a check. However, in doing so, I eliminate 2 first-class letters each month for each bill I pay online. First, the company does not have to send me a paper statement, and second, I don't have to mail it back to them. Online bill payment has led to a dramatic decrease in first-class mail volume, and the USPS is looking at ways to make up this revenue. Of course, postage rate increases are the usual method of dealing with loss of revenue.
However, customers who pay bills online can help out the postal service, and it won't cost you a cent. When you sign up for a new credit card, or start phone service, or whatever it is that generates a monthly bill, the companies factor in their cost of doing business with you. This normally includes the cost printing and mailing you a paper statement each month, and processing your payment by check. However, these companies want you to pay over the internet, and stop paper statements. It saves them money, and increases their profit margin. Online bill payment makes these companies richer, and customers are very eager to help them out!
Here's what I'm suggesting. Go ahead and pay your bills online to save your checks and postage. However, when the company offers to send you electronic statements each month, do not take them up on this. Let them continue to mail you paper statements. That way, the Postal Service will continue to have the first class mail from these companies, but at the same time, you will be saving money. In the long run, you will be doing your part to help eliminate the need for that next postage rate increase. And best of all, it won't cost you anything.
Method #2. Use USPS for Package Shipments
The USPS has lost much business to competitors like UPS, FedEx, and DHL. Most postal customers who complain about postal rate increases can usually blame themselves, because they receive shipments from these competitors. Loss of business for USPS means less revenue, which means postal rates climb. Therefore, when doing business, insist on using the Postal Service as much as possible.
Is the USPS competitive with the other shippers? I just did this comparison for two zip codes about 500 miles apart. For a 5 lb package that is 12 inches by 12 inches by 12 inches, here are the rates as of April 24, 2008.
| USPS | FedEx | UPS | DHL | |
| Express | $30.70 (by noon) | $63.18 (by 3PM) | $52.86 (by end of day) | $66.92 |
| 2nd Day Air | $8.90 (Priority) | $24.48 | $21.60 | $27.94 |
| Ground | $8.23 (Parcel Post) | $8.19 | $11.00 | $10.01 |
As you can see, USPS easily beats the competition for next day service and second day air (called Priority by the Postal Service). Ground is the only place USPS is beat, by FedEx. FedEx did not list their "ground" pricing, however. The $8.19 is for FedEx Home Delivery 2 business day. Interestingly, they listed a four day ground option for $21.42.
Clearly, if you have personal packages to mail, USPS is probably the best, most cost-efficient method. If you are receiving packages that you order from online retailers, the cost calculation is different. UPS and FedEx do volume discounting for mass mailings of packages, helping them compete with the low rates of the Postal Service. As of May 2008, the Postal Service is also offering volume discounts to shippers.
When you place orders for merchandise, insist on USPS shipping. It will be the about the same cost as our competitors or less. Some businesses only offer UPS or FedEx. Tell them you will buy from someone else. They are competing with other businesses, and will not want to lose your business. Enough complaints and they will offer USPS.
3. Support the Greeting Card Industry
This one will cost you money, but think about it. You can send an e-card, but it is so impersonal. Sending a real card will show the recipient that you care enough to take the time to choose a card and mail it.
The United States Postal Service still offers the best rates in the world for first class letter mail. If we want to keep it this way, we need to use it. In the long run, you will be helping us keep our rates low.