No increase planned for first-class postage

[October 20, 2009]  WASHINGTON (AP) -- The price of first-class stamps will not go up next year.

The Postal Service has been implementing rate increases annually in recent years, with increases announced in January to take place in May.

The rate went from 42 cents to 44 cents this year.

But Postmaster General John E. Potter announced in an internal postal memorandum that there will be no rise in prices next year for products in which the agency dominates the market, such as first-class mail.

"Simply stated, there will not be a price increase for market dominant products including first-class mail, standard mail, periodicals and single-piece parcel post," Potter said in a memo to staff.

First-class rates cover the type of mail most widely used by individuals, cards and letters. Many businesses use first-class service to deliver bills.

Standard mail is advertising mail, periodicals include newspapers and magazines, and single-piece parcel post covers packages sent by individuals.

The post office has been struggling with losses as more and more letters and bill payments move from paper to the Internet. Thousands of jobs and work hours have been trimmed, local postal branches are being studied for closure, and increased automation is being put in place.

Congress delayed for a year the agency's requirement to make an advance payment of more than $4 billion in future retiree health benefits.

"While increasing prices might have generated revenue for the Postal Service in the short term, the long-term effect could drive additional mail out of the system. We want mailers to continue to invest in mail to grow their business, communicate with valued customers, and maintain a strong presence in the marketplace," Potter said in his statement.

An announcement is expected next month on whether there will be price changes for competitive products -- priority mail, express mail, parcel select and most international products.

___

On the Net:

U.S. Postal Service: http://www.usps.com/

[Associated Press; By RANDOLPH E. SCHMID]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.