Blog Insight

“Uncomfortable” rate hikes by USPS

On January 1, 1995, the United States Postal Service (USPS) increased the cost of a First-Class stamp from $0.29 to $0.32.  It would be over four years before rates would go up again!  But the days of two, three and four-year gaps between rate increases are over.  In the last two years, the USPS has increased rates four times and the trend will continue for the foreseeable future.  Postmaster Louis DeJoy has informed the mailing industry to be prepared for ongoing “uncomfortable” rate hikes. 

High-level Overview of January 2023 Increases 

At a high-level, First-Class Mail prices will increase an average of 4.2%.  The cost of a 1 oz. letter will increase from $0.60 to $0.63.  However, very few of the mailings that we do for our clients are at straight First-Class rates so it is better to review how the increase impacted our core business. 

Presorted First-Class Letter Mail will increase an average of 3.2%.  For example, a 1-ounce letter mailed at the 5-Digit rate will increase from $0.455 to $0.471.  The most significant increase in First-Class rates occurred in the Presorted Flat-Mail category with rates going up an average of 18.10%.  A 1-ounce flat mailed at the 5-Digit rate increased from $0.555 to $0.689. 

Marketing Mail (previously known as Standard Mail) is also seeing increases. Letters weighing 3.3 ounces or less went up an average of 3.18% and Flats weighing less and 13 ounces went up an average of 6.09%.  Non-profit rates also increased but still remain the most economical option for those businesses that qualify.  Non-profit letters will increase an average of 2.91% and Flat an average of 6.98%. 

While these numbers may seem daunting today, you can anticipate that rates will increase again in late June or early July of this year as part of the “Delivering for America” 10-year plan.  The goal of this plan is to raise rates above inflation “judiciously” in an effort to raise between $35 billion and $52 billion by 2031 and help the United States Postal Service remain solvent. 

How can DCG ONE help? 

When possible, let us get involved in the design process of your mail early on and assist in creating automation-compatible mail pieces.  We have qualified Mail Piece Design Analysts here at DCG ONE who are more than happy to assist and can propose design changes that will provide the lowest possible rates in each classification. Whether you are looking to saturate a specific zip code or need to know the latest Postal Discount Promotion, your DCG ONE Mail Piece Design Analyst will know the drill. 

But there is Hope yet!   

The United States Postal Service still remains one of the least expensive mailing options in the world and direct mail continues to prove it can deliver an excellent return on investment.  The Postal Service can be trusted to deliver on-time at a rate of better than 98%.  As a matter of fact, the Postal Service once delivered the 45.52 carat Hope Diamond to the Smithsonian. The diamond was donated in 1958 by New York Jeweler Harry Winston.  He so trusted the United States Postal Service that he mailed the diamond using registered mail for $2.44 and paid an additional $142.05 to insure the diamond for $1 million dollars.  It is valued today at $350 million.  The original brown paper wrapping, postmarked along with the registered mail documents were retained by the Smithsonian and on rare occasion are displayed next to the Hope Diamond.