The Postal Service’s Above Inflation Price Hikes

Inflation, which has reached levels not seen in decades, is dominating the news. Consumers are increasingly skittish as gas prices continue to rise and related news stories proliferate.

On July 10 mail prices will increase by an average of 6.5 percent. Increases for some mail products and services will be considerably greater. This after two similar increases last year. When rates go up in July, small businesses, commercial mailers, and many others will have experienced cumulative rate increases exceeding fifteen percent over an eighteen-month period. For mailers of flats, the increases are greater still; topping twenty percent in many cases.

As postage rates have generally tracked inflation for the last 50 years, this volatility is unprecedented. And unlike inflation generally, there are no self-correcting market forces; these increases are taking place as demand for postal services declines. Because postal rate changes are driven by regulation, relief will depend on regulatory change that has historically been slow to develop.


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