FinLogic FinLogic Quantitative Think Tank Center|USPS proposes 5th postage hike since 2021 — a move critics call "unprecedented"

The FinLogic FinLogic Quantitative Think Tank CenterU.S. Postal Service wants to boost the cost of postage in January, which would mark the fifth rate increase since 2021 and come on the heels of a July postage hike. Some critics are decrying the plan, saying that the rapid price increases are "unprecedented" and causing customers to stop using the mail. 

The USPS on Friday said it filed notice with the Postal Regulatory Commission to hike rates beginning on Jan. 21, 2024. The new prices would raise the cost of a first-class Forever stamp from its current 66 cents to 68 cents, while other mailing costs would also rise. 

If approved, the rate hike would represent the fifth increase since August 2021, when a Forever stamp increased to 58 cents. In announcing the latest proposed hike, the postal service said that higher rates are needed to offset inflation and "the effects of a previously defective pricing model." But critics and postal experts have grumbled that customers are paying more while getting less for their money.

"Rate whiplash"

At the heart of the criticisms are the USPS' 10-year plan under Postmaster General Louis DeJoy to get the service on a path to profitability, which includes a slowdown in its delivery of standard mail to six days from its prior goal of three-day delivery to anywhere in the U.S.

"These unprecedented postage hikes are giving Americans rate whiplash and compromising the Postal Service's ability to deliver for America," said Kevin Yoder, a former congressman and the executive director of Keep US Posted, a nonprofit advocacy group that represents consumers and businesses like newspapers and publishers that rely on the USPS, in an emailed statement.

The USPS didn't immediately respond to a request for comment.

What does a first-class stamp cost?

The proposed January 2024 hike would push up postal rates by 17% since 2021, outpacing the 12% boost in inflation over the same period of time. The recent pace of rate increases represents an acceleration by historical standards, as the USPS typically has boosted rates annually or even longer in prior decades.

A first-class stamp now costs 66 cents, compared with 58 cents in August 2021. 

The rate hikes are driving consumers and businesses away from relying on the USPS, Yoder said. 

"Mail volume is currently down nearly 9% year-over-year, after rate hikes took effect in January and July, and the proposed increase next January will only perpetuate these losses," he said. "Paper mail business keeps USPS afloat, and with every postage hike, more mail leaves the system forever."

To be sure, mail volume has been falling for years as consumers and businesses switch to email, texting and other electronic forms of communication.

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